In Business Magazine - March 2012

MAR. 2012

Roundtable: Are You Wor king Harder for Less Profit?

Franchise:

Leveraging a Proven Commodity Power Questions

Build Business Power Lunch By the Numbers Business Events

This Issue National Association of Women Business Owners

BUSINESS. ARE YOU READY FOR A BANK THAT KNOWS BUSINESS?

We’re

READYto:

Credit approval required.

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March 2012

www.inbusinessmag.com In Business Magazine is a collaboration of many business organizations and entities throughout the metropolitan Phoenix area and Arizona. Our mission is to inform and energize business in this community by communicating content that will build business and enrich the economic picture for all of us vested in commerce.

Partner Organizations

Donna Davis, CEO Arizona Small Business Association Central Office (602) 306-4000 Southern Arizona (520) 327-0222 www.asba.com

Steven G. Zylstra, President & CEO Arizona Technology Council One Renaissance Square (602) 343-8324 • www.aztechcouncil.org

Kristine Kassel, President NAWBO Phoenix Metro Chapter (602) 772-4985 • www.nawbophx.org

Rick Kidder, President & CEO Scottsdale Area Chamber of Commerce (480) 355-2700 • www.scottsdalechamber.com

AccelerAte

revenue & Business Growth

Accelerating Business Performance Through

Mary Ann Miller, President & CEO Tempe Chamber of Commerce (480) 967-7891 • www.tempechamber.org

throuGh systems

Our Partner Organizations are vested business organizations focused on building and improving business in the Valley or throughout Arizona.

As Partners, each will receive three insert publications each year to showcase all that they are doing for business and businesspeople within our community. We encourage you to join these and other organizations to better your business opportunities. The members of these and other Associate Partner Organizations receive a subscription to In Business Magazine each month. For more information on becoming an Associate Partner, please contact our publisher at info@inbusinessmag.com.

Installing fun systems that grow revenue!

Ahwatukee Foothills Chamber of Commerce www.ahwatukeechamber.com

Developing the people you have!

Arizona Chamber of Commerce & Industry www.azchamber.com

Innovative Thinking

Associate Partners

Customer Service people that really up-sell!

Hiring sales people that can & will sell!

Arizona Hispanic Chamber of Commerce www.azhcc.com Chandler Chamber of Commerce www.chandlerchamber.com Economic Club of Phoenix www.econclubphx.org Glendale Chamber of Commerce www.glendaleazchamber.org Greater Phoenix Black Chamber of Commerce www.phoenixblackchamber.com

Meet with us.

After one hour you will know more, produce more and see if we fit.

(602) 840-0003 www.conquesttraining.com © 2011 Conquest Training Systems, Inc. Phoenix, Arizona

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M a r c h 2012

Greater Phoenix Gay & Lesbian Chamber of Commerce www.gpglcc.org Mesa Chamber of Commerce www.mesachamber.org North Phoenix Chamber of Commerce www.northphoenixchamber.com North Scottsdale Chamber of Commerce www.northscottsdalechamber.org Peoria Chamber of Commerce www.peoriachamber.com Westmarc www.westmarc.org

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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.

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

Ángel Cabrera, 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

Victor F. Trastek, 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

President & CEO SCF Arizona

Friday, May 18, 2012

Guest Editors since November 2010

Arizona Biltmore Resort The Grand Ballroom

For more information: Phone: 480-588-9505 x213 Email: info@inbusinessmag.com

11:30a Registration & VIP Reception 11:50a – 1:30p Lunch & Symposium

Individual Lunch: $65 Tables of 10: $650 Corporate Sponsorships Available

Register today at inbusinessmag.com Presented by:

*Not all guest editors have confirmed their attendance at time of press.

March 2012

Franchise:

Leveraging a Proven Commodity Power Questions

Build Business MARCH 2012 • inbusinessmag.com

The Growing Skills Gap: Can We Compete?

SKILLS GAP

22

MAR. 2012

IN BuSINESS MAGAZINE

Contents

Roundtable: Are You Wor king Harder for Less Profit?

Power Lunch By the Numbers Business Events $4.95 INBUSINESSMAG.COM

This Issue National Association of Women Business Owners

It’s a wake-up call as Arizona faces an urgent need for highly skilled workers to accelerate our economic recovery. Sue Kern-Fleischer speaks with business development professionals, members of the Governor’s Council on Workforce Policy, some of the state’s largest employers and others to lay out the parameters of Arizona’s potential crisis.

Departments

9 Guest Editor

Craig R. Barrett, retired CEO and chairman of the board of Intel Corp., introduces the “Skills Gap” issue.

Features

10 Feedback

18 Don’t Go It Alone

Sharing the insights and experience of successful franchisors and franchisees, Gremlyn Bradley-Waddell explores the enterprise of building business around a proven commodity.

18

28

28 Ask, Don’t Tell

Andrew Sobel and Jerold Panas share the power questions that help build better business relationships.

Business Education

34 Systems … or How to

Make the Perfect Latte

Marketing and communications coach Kathy Heasley concludes her six-part series on branding by illustrating the important whys and hows of consistency in brand identity.

36 Building Your Sales

Team Correctly

In the fifth of his six-part series, sales coach Mike Toney identifies different selling styles and describes how they fit — or don’t fit — a company’s product or service.

30 Nonprofit

Hospice of the Valley The Board of Visitors

38 Assets

BMW X6 M and anti-virus software

Noted business and community leaders Mayor Greg Stanton, Barry Broome and Jeffrey A. Martin respond to IBM’s burning business question of the month.

12 Briefs

“Centennial Brings Dollars to the Copper State,” “New Local Job Site Blends Value and Quality,” “Mortgage Document Services Company Expands to Scottsdale,” “Fostering a Global Private Equity Mindset,” “Phoenix Company Sees Pay-off of Working with Pets” and “Meetings that Get Things Done”

16 By the Numbers

Study scores states on economic subsidies’ effectiveness. Plus: Key economic indicators provide a sense of the health of the local economy.

20 Trickle Up

View from the top looks at how John Leonesio, CEO of The Joint… the chiropractic place, forged chains of success by focusing on key industry changes.

29 Books

New releases that explore behavior triggers offer key insights and strategies for bettering business.

39 Power Lunch

“A Fine American Eatery in Cask 63” Plus: “Midday Hot Spots”

50 Roundtable

Implement the 80/20 Rule to increase company profits.

Networking

31 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 Special Sections

41 National

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inbusine ssmag.com

March 2012 • Vol. 3, No. 3

passionate about your profitability Publisher Rick McCartney

At Holmes Murphy, we think providing you with innovative answers

Editor RaeAnne Marsh

to the ever-increasing challenge of rising health care costs is one

Art Director Benjamin Little

Contributing Writers G remlyn Bradley-Waddell Kathy Heasley Mike Hunter Sue Kern-Fleischer Elizabeth Rush Kruger Brett Maxwell Jerold Panas Mike Richardson Andrew Sobel Alison Stanton Mike Toney

of the most important things we can do to affect your company.

That’s why we take the time to get to know your company’s challenges and consult with you to provide the highest-quality, lowest-cost solutions — tailored especially for your business.

If you are looking for an advisor who understands the complexities of Employee Benefits and a partner who helps you develop the right financial solutions, call Holmes Murphy — the nation’s 22ndlargest* broker.

Photographer-at-large Dan Vermillion

14850 N. Scottsdale Road, Suite 280 Scottsdale, AZ 85254 480-951-1776 | 877-951-1776 holmesmurphy.com DES MOINES | CEDAR RAPIDS | DAllAS | DAvENPORt | DENvER KANSAS CIty | MADISON | OKlAhOMA CIty | OMAhA | PEORIA PhIlADElPhIA | SCOttSDAlE | SIOux FAllS | St. lOuIS

Advertising

Operations Louise Ferrari

lferrari@inmediacompany.com

Senior L ouise Ferrari Account Executives lferrari@inmediacompany.com

April Ray

aray@inmediacompany.com

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cshore@inmediacompany.com

Learn more about how Holmes Murphy will be a trusted advocate for you — visit holmesmurphy.com. ©2011 Holmes Murphy & Associates

* Business Insurance, July 2010

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. 3. 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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inbusine ssmag.com

Craig R. Barrett, Retired CEO/Chairman of the Board, Intel Corporation

Guest Editor

Let’s Fill the Gap

Craig R. Barrett, Ph.D., received his doctorate degrees in Materials Science from Stanford University, and served on the Stanford faculty after graduation. His studies include a NATO postdoctoral fellowship at the National Physical Laboratory in England. A leading advocate for improving education in the U.S. and the world, and a vocal spokesman for the value technology can provide in raising social and economic standards globally, Dr. Barrett chairs Achieve, Inc.; Change The Equation; and Dossia. He serves as international co-chairman of the Skolkovo Foundation Council; is chairman of the Governor’s Arizona Ready Education Council; is on the faculty of Thunderbird School of Global Management; and is a leader on numerous other boards, policy and government panels.

There are many reasons for business to move to Arizona or for a business to exist here and flourish.

However, over the past two decades, as economies and opportunity grow elsewhere, Arizona has lagged in the critical area of education and now finds itself with a dramatic skills gap — a result of actions and inactions on the part of business organizations, city and state governments, and especially our education system.

We all know that a quality education is critical for success in the 21st century. The ability to add value in the work place is the key determinant to a good salary, and education is key to adding value. At this time, Arizona ranks rather poorly in all aspects of education, whether it is K-12 quality, the percentage of our work force with a university degree (especially in the hot areas of math, science, engineering and technology), or the quality and quantity of our vocational training programs. Certainly we have pockets of excellence in all areas of education, but, on average, we are failing our young people and consequently not generating the quality work force we need to compete around the world. This fact is not lost on companies looking to expand their operations in Arizona. The number one issue with expansion plans is always the availability of a quality work force, and education is the number one issue with workforce quality.

When questioned, all Arizonans understand the importance of education to our future, but all too often the gap between reality and what we need is as wide as the Grand Canyon. The public, the business community, our education leaders and our political leaders have to face the hard facts. If we want a vibrant economy with good-paying jobs and opportunity for our young people, then we have to focus on the twin pillars that Michael Crow at ASU has eloquently prioritized as his top challenges: quality and quantity. We need to educate more students at higher quality if we want to succeed. Just comparing ourselves to the school or state next door is insufficient. We need to compare and improve our educational system to the best in the world.

In this issue of In Business Magazine, Sue Kern-Fleischer digs into this subject of a skills gap that is hampering growth and opportunity for business and for our work force. She speaks with top business leaders, members of the Governor’s Council on Workforce Policy and others who are vested in strengthening our education, training and workforce efforts to develop our plan to fill this skills gap and ensure that Arizona is a leader in industry and economic prosperity. On other pages, Gremlyn Bradley-Waddell explores business and legal aspects of developing a franchise or being involved in one. She speaks with both franchisor professionals and franchisees in a variety of industries. And this month’s “Trickle Up” focuses on John Leonesio, himself a successful franchisor whose leadership has energized The Joint...the chiropractic place.

In Business Magazine continues its focus on education for businesspeople at all levels of business. In this issue, Kathy Heasley of Heasley & Partners finalizes her six-part series on branding by revealing top steps to implement systems to build business. Mike Toney of Conquest Training Systems continues his series on sales with insights on key distinctions in developing the right kind of sales team for different types of business.

I am pleased that In Business Magazine is focusing on issues that affect our business community. Bringing issues to the surface and presenting them to our business community are important steps in creating change.

I hope that you will enjoy this issue.

Sincerely,

Craig R. Barrett Retired CEO/Chairman of the Board • Intel Corporation

Education, Education, Education It is so clear in talking with business leaders and even some politicians that education is the way to strengthen Arizona economically. A strong education system from primary to graduate school here in Arizona will prep us for a better future. It will take bold political leadership and engaged businesspeople to make this happen here, and it is time we focus.

inbusine ssmag.com

We thank Craig Barrett and the participants of this issue’s cover story who are forward thinkers and are working daily to improve education in Arizona. With a home-grown, well-educated, skilled work force, we can expect to achieve the impossible in Arizona and compete to gain industry, opportunity and prosperity in business and beyond.

—Rick McCartney, Publisher

Connect with us: 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

M a r c h 2012

9

Feedback

Valley Leaders Sound Off

Executives Answer

A local “educated work force” is cited as a necessity for Arizona’s economy to flourish. What do you see as the priorities to ensure we attract or retain a qualified, skilled work force right here in the Valley?

Doug Bruhnke

Jeffrey A. Martin

Arizona has problems with education: 74 percent of 4th graders are below proficient in reading, 69 percent of 8th graders are below proficient in math and 50 percent of high school graduates can’t qualify for Arizona’s universities (per expectmorearizona.org).

Education matters more than ever in our increasingly competitive global marketplace. We need many more critical-thinking, creative and collaborative workers, managers and leaders — not fewer.

Research has shown that a more educated population creates less crime, requires less financial assistance and better supports today’s modern companies, and yet efforts to improve education in Arizona are often stalled by old arguments. There is reason to believe that things will get better because smart leaders like Michael Crow of ASU, Glenn Hamer of the Arizona Chamber of Commerce & Industry and Steve Zylstra of the Arizona Technology Council are pushing to create more world-class education in support of technology, manufacturing and other growth businesses. Besides their efforts, support by businesspeople of improved education for all students can help break through the gridlock and improve business retention and attraction efforts.

The Phoenix metro area has no lack of outstanding undergraduate and graduate programs that have the ability provide a continuous feeder system for local industry. However, far too many of our students and skilled professionals leave the Valley because investment in growth businesses (e.g., life sciences, clean tech, medical device, green materials, alternative energy, nanotechnology, etc.) fall far below that of neighboring regions such as Southern California or Texas.

For example, during the last quarter of 2011, as venture funding grew a significant 20 percent over the previous year, investment in Arizona continued to be weak, benefitting from less than 1 percent of all capital invested, whereas neighboring Texas captured 5 percent; Southern California, 12 percent; and, of course, Northern California (Silicon Valley), 46 percent.

A long-term approach to attracting capital to Phoenix emerging technologies should become a primary focus, with academia, industry and state government playing key roles. Phoenix is already educating our country’s new leaders; let’s keep them here!

Growth Nation growthnation.com

Yulex Corp. yulex.com

Doug Bruhnke is CEO of Growth Nation. The company, which he founded in 2001, helps companies grow locally and globally with high ROI using well-crafted marketing, sales and sustainability tools and services. Bruhnke is also president of Arizona Council for International Visitors and Arizona International Growth Group. He was born in New York and has been a resident of Scottsdale since 2003.

Jeffrey A. Martin is co-founder of Yulex Corp., the first commercial enterprise to produce bio-based, medical-grade latex that is safe for people with latex allergy. Prior experience includes corporate officer and VP of sales for Safeskin Corp., which he was instrumental in positioning as “The Best Small Company in America” (Forbes Magazine, 1996).

Martin received his degree in engineering from the Georgia Institute of Technology, where he was recently inducted into the Academy of Distinguished Engineering Alumni.

Founder and CEO Growth Nation Sector: International Trade

Greg Stanton

Mayor City of Phoenix Sector: Government

Retaining talent is about quality of place, not just quality of education systems. We cannot fail to focus on quality-of-life impacts on keeping our existing talent and attracting new talent. Phoenix must be an interesting and safe place to live, and an easy place to start and grow a business.

But education is vital. We must have a relentless commitment to education if Arizona is going to be competitive in a global economy.

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President & CEO Yulex Corporation Sector: Green Technology

I’ve been questioned whether it is appropriate for a city government to be involved in education. I always answer with, “How can we not be?”

We must use the bully pulpit to be champions of our schools, from early childhood programs to higher education. We must also put more focus on STEAM education (science, technology, engineering, arts and math). Cities, not just Phoenix, are ready to lead on this because mayors understand that economic success begins and ends with our schools.

City of Phoenix phoenix.gov

A native Phoenician, Mayor Greg Stanton completed his undergraduate degree at Marquette University and his law degree at University of Michigan. He was appointed to the Phoenix City Council in 2000, then won the seat in the 2001 and 2005 elections.

Stanton has been recognized for his community service with awards that include Arizona Big Brother of the Year.

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Briefs

Quick and to the Point

Centennial Brings Dollars

Mortgage Document

A lot of people are visiting Arizona this year to help us celebrate our state’s Centennial, and those tourist dollars are part of the revenue generated by the statehood celebration.

Although the big gala Fandango rocked the capital on the anniversary of statehood, Feb. 14, other events have been and will be taking place all year long, all stimulating tourism to our Copper State. In fact, some started in 2010. An Arizona Best Fest held in Prescott last September was rated a success in that community, reports Karen Churchard, director of the Arizona Centennial Commission. “The town sold out and surrounding areas — Prescott, Prescott Valley, Gerome, Cottonwood. Hotels, restaurants, bars, retail stores — everybody in Prescott was very, very pleased with the economic impact it had in that area.”

Among other Best Fests around the state — a free-to-attend event supported by sponsors, foundations and individuals — was the one held in Downtown Phoenix the weekend preceding Fandango that was also the culmination of the Arizona Centennial motorcycle ride which attracted participants from around the country. The Centennial Ride “made a little revenue,” according to Churchard. More revenue came from the sale of tickets to enter the drawing to win the Copper Chopper, produced by world-renowned bike builder Paul Yaffe, that toured the state as the Centennial mascot from October 2010 to February 2012.

Tourism is the biggest revenue benefit from the Centennial activities that include more than 400 Arizona Historical Advisory Commission-designated legacy projects held in 2011 through the end of 2012, but, additionally, the Arizona Centennial 2012 Foundation contracted with a company to develop Centennial merchandise being sold online as well as in Safeway, Fry’s Market and Circle K and is also working with companies to provide official products from food to a Centennial Ping putter. Speaking with In Business Magazine in early February, Churchard said, “Interest regarding Centennial merchandise is just coming to a head.”

—RaeAnne Marsh

DocuTech Corporation, a leader in compliance services for mortgage documents, recently acquired the assets of Lender Support Systems, Inc.’s Docs3D mortgage document software from parent company Emphasys Software and, in support of its continuing growth, has opened a new office in Scottsdale.

“DocuTech selected Scottsdale as the location for its expansion for a couple of reasons,” says Ty Jenkins, DocuTech founder and CEO. “One, it is a major hub of regional lenders, and those lenders are beginning to grow again and need document compliance support. The Phoenix area is also a great source of talent for DocuTech as we grow and expand our staff.”

Founded in 1991, DocuTech provides compliance services and documentation technology for the mortgage industry.

Its software interfaces with leading loan origination systems and enables mortgage professionals to generate documents locally.

Metro Phoenix’s geographic position as centrally located to many of DocuTech’s existing customers also enables stronger customer and sales support, Jenkins notes.

—RaeAnne Marsh

to the Copper State

Services Company Expands to Scottsdale

DocuTech Corporation docutechcorp.com Arizona Centennial 2012 Foundation

az100years.org

New Local Job Site Blends Value and Quality

With its launch last month, the online job site LocalWork.com brings Phoenixarea business owners a new venue through which to attract qualified job applicants. The intent, according to founder Ryan Naylor, is to provide a reasonably priced and highquality option in a sophisticated platform that includes a program that enables employers to rate and sort applicants and also help them keep the e-mailed replies and resumes organized in one convenient location.

The website is the brainchild of Naylor, a small-business employer who says he has found it challenging over the years to recruit quality talent online at an affordable price. “A lot of the major national job posting websites charge $400 or $500, which definitely cuts into my budget and then what I can afford to pay people,” says Naylor, who plans to charge $50

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per posting but is offering the service at half that rate through April 30. “On the other side,” he adds, “there is craigslist, which costs just $25 to post a job listing, but that usually involves being bombarded by sometimes hundreds of e-mails by people who are not necessarily qualified.”

LocalWork.com does not allow spam postings like multilevel marketing positions or work-at-home jobs, a restriction Naylor says makes the site more user-friendly for serious job seekers. The website also allows applicants to upload a video of themselves, which allows employers another way to screen their job candidates. And employers may post each listing in up to three different categories, an advantage that Naylor notes also makes it a great deal over its competitors, which typically allow just one selection.

—Alison Stanton LocalWork.com localwork.com

Fostering a Global

Private Equity Mindset

Professionals in the private equity and venture capital space will come together as Thunderbird School of Global Management, the number one-ranked school of global business worldwide, presents its eighth annual Global Private Equity Investing Conference April 4 and 5 at its Glendale campus. An international slate of thought leaders comprised of venture capitalists, corporate leaders, analysts and government officials will share their perspectives on the current flow of private equity, how transactions are being structured, and current trends in the marketplace.

The conference focus is identifying and facilitating an understanding of the changes and current activity in global private equity and venture capital markets in areas from mineral rights to energy production. It will look at opportunities in frontier countries, former Soviet Bloc states and other emerging economies. inbusine ssmag.com

services leadership institute the 26th annual

what service experiences are your customers seeking?

what price are your customers willing to pay?

do you know what your customers truly want from you?

March 19-21, 2012

Arizona State University, Tempe Campus “ The Institute session was exactly what I needed to help me succeed in my current role and to help me achieve the next step in my career.”

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The 26th Annual Services Leadership Institute will bring together leading academicians along with seasoned business leaders to show you how to apply a proven process for service quality in your organization. You will identify key improvement points to make the greatest impact on delivering what your customers really expect and what they need to remain loyal.

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M a r c h 2012

13

Briefs

Quick and to the Point

Among the keynote speakers are His Excellency Mr. Amr Al-Dabbagh, governor and chairman of the board of the Saudi Arabian General Investment Authority, with the rank of Minister, known for visionary and highly ambitious leadership that has seen the value of SAGIA’s investment licenses grow during his eight years with the organization to more than 40 times its total at its inception in 2000; and Robert Grady, chairman of the New Jersey State Investment Council and managing director of Cheyenne Capital, whose 19 years experience in private equity includes global coordinator of venture and growth capital at The Carlyle Group and deputy assistant to President George H.W. Bush and executive associate director of the Office of Management and Budget in the White House.

—RaeAnne Marsh Thunderbird School of Global Management thunderbird.edu

Phoenix Company Sees Pay-off of Working with Pets

We love our pets. According to a recent survey conducted by the American Pet Products Association, 62 percent of U.S. households (72.9 million homes) own a pet, with 46.3 million of those owning a dog. We’re also quick to open our wallets to provide quality care for our fourand two-legged friends. In 2011, total U.S. pet industry expenditures reached an estimated $50.8 billion.

Villa La Paws, a cage-free pet resort, spa and canine training company with two Phoenix locations, is counting on America’s love for animals to catapult its new franchise program, Villa La Paws LLC, nationwide.

“The demand is there, and our business model offers a number of key differentiators that sets Villa La Paws apart and makes it an attractive franchising product,” says Tom Murray, Villa La Paws CEO and president, who can show a sixyear track record of success for his business.

Villa La Paws launched its nationwide franchise program last month. Core services include cage-free dog day care, pet grooming, dog training and overnight care. In addition to its completely cage-free facilities, what sets the Villa La Paws franchises apart is its use of technology, which is incorporated into the franchise model and includes 24-hour, indoor/outdoor webcams accessible online and via the resort’s smart phone application, an iPhone-based national call center, and an integrated business system.

—Sue KernFleischer Villa La Paws villalapaws.com

Business Tips

Meetings that Get Things Done Technology is constantly speeding up the pace of business.

Decisions once delayed for weeks are now made in seconds thanks to Internet communication. Computer analytics puts real-time market information at our fingertips. Transactions can occur anywhere, any time. Just to keep pace, businesses must develop the organizational agility to move quickly and decisively, and it’s absolutely critical if they want to do more than just survive.

Unproductive and time-wasting meetings are one of the biggest obstacles to organizational agility. To develop agile meetings with traction: Map the meeting. Create a standing agenda and a master spreadsheet with tabs relevant to each agenda item with the expected inputs, throughputs and outputs.

That way, the meetings are easy for the chairman to run because everything is crystal clear.

Set the mood. Set the tone for the energy level by playing a video or music. To start it off, tell a story, read a quotation or be unpredictable and create a surprise factor.

Spark creativity. Frame the purpose of the meeting as a question: “How do we best …?” Questions get the human brain thinking more quickly.

Document the action live. Instead of taking notes, editing them and distributing them afterward, save time by capturing everything electronically in real time. Action items can be projected for all to see during the meeting, then made available in a master spreadsheet hosted on the company’s server for easy access by all.

Time-box everything. Meetings should last 45 minutes, from five minutes after the hour to 10 minutes before the next hour. Allot time for each agenda item and especially for presentations. Get people used to the fact that anything which runs over will be guillotined. When

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M a r c h 2012

people are challenged to figure out how to get things done in the time allotted, it’s amazing how they can.

Leverage the wall space. Wall space is one of the most underutilized assets in a business. Post on the wall the standing agenda, creative problem-solving frameworks, the company’s core values, key elements of the strategic plan, inspirational quotations, etc., all in a format large enough to refer to during the meeting.

Generate input. Have everyone take a minute to write down an idea relevant to the agenda item. Go around the table and allow each person to share his or her idea, or break into pairs or triads to discuss the ideas and report back. (Remember to allot time for each step of the process.)

Get fast consensus. Once the options are on the table, prompt the group with statements and questions to facilitate fast decisions: “I’m leaning toward this …”; “Does anyone have a violent objection to that … ?”; “Can everyone get behind that?” Then move them into fast action: “How would we best do that?”

Agility is the ability to be constantly looking for opportunities to move forward toward goals while planning for problems, capitalize on fleeting opportunities, rebound from problems and make decisions on the turn of a dime. That doesn’t happen in businesses where executives and workers are bogged down by burdensome systems, procedures and time-wasting meetings stuck in minutiae. Instead of shooting forward when they press on the gas, they go into a futile wheel spin. Creating agile meetings is one big step toward creating an agile organization that is in traction.

—Mike Richardson Wheel$pin: The Agile Executive’s Manifesto: Accelerate Your Growth, Leverage Your Value, Beat Your Competition mydrivingseat.com

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M a r c h 2012

15

By the numbers

Metrics & Measurements

Subsidy Accountability is Good Economic Development

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.

Study shines light on the economic black hole of state subsidies meant to build business States are spending billions per year on corporate tax credits, grants and other economic development subsidies that often require little if any job creation and lack wage and benefit standards covering workers at subsidized companies.

These are the key findings of Money for Something: Job Creation and Job Quality Standards in State Economic Development Subsidy Programs, a study by Good Jobs First, a nonprofit research center based in Washington, D.C. “With unemployment still so high, taxpayers have a right to expect that economic development investments create significant numbers of quality jobs,” says Good Jobs First Executive Director Greg LeRoy. “If subsidies do not result in real public benefits, they are no better than corporate giveaways,” adds Good Jobs First Research Director Philip Mattera, principal author of the report.

Money for Something rates the performance standards and job quality requirements of 238 key subsidy programs from the 50 states and the District of Columbia. Each is rated on a scale of 0 to 100. Arizona ranked relatively well and above the average score of 40 with a 42 score, ranking 17th.

The study found that fewer than half (98) of the 238 programs it evaluated impose a wage requirement, and only 53 of those are tied to labor market rates. Only 11 of the wage requirements raise pay levels by mandating rates somewhat above existing market

averages. Wage requirements vary from just above the federal minimum to more than $40/hour in limited cases. Regarding health benefits, only 51 programs require that a subsidized employer make healthcare coverage available and only 31 require an employer contribution to premiums.

Subsidy programs vary from sales tax exemptions to cash grants and include corporate income tax credits, enterprise zones, low-cost capital financing and loan guarantees, and reimbursement for worker training expenses.

Acknowledging that subsidies are common practice, the report also notes they have long been controversial over such issues as existing companies suffering a competitive disadvantage or greater tax burden, and subsidized companies creating jobs of such poor quality that the government ends up with more calls on its social safety-net programs for the employees and their families.

Although subsidies are defined as the various forms of financial assistance given to companies to encourage the growth of business activity and job creation within a state’s borders, Good Jobs First’s research found many programs that are given subsidies have little accountability to ensure that desired outcome. Most states have dozens of such programs, which in the aggregate cost state and city taxpayers an estimated $70 billion each year.

—Mike Hunter

Good Jobs First goodjobsfirts.org

State

Average

Grade

State

Rank

Average

Grade

17*

46

C-

Nevada

1

82

B

California

42

23

D

North Carolina

2

79

B-

Colorado

13**

51

C

Vermont

3

77

B-

1

82

B

Iowa

4

70

B-

New Mexico

39

27

D

Maryland

5

68

C+

Texas

22

42

C-

* Tied with Delaware and Mississippi

Utah

32

32

D+

** Tied with Georgia and Kansas

For more information on the criteria used to score these states, see the full report, Money for Something, at goodjobsfirst.org.

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M a r c h 2012

YOY % Change

7.9%

0.11

1,742.5

1.64

No. of Housing Permits (Dec. 2011)

573

19.2

Consumer Confidence* (Q1 to date) (Arizona)

69.5

9.64

Average Hourly Earnings (Dec. 2011)

22.73

-0.09

Job Growth (in thousands) (Dec. 2011)

Eller Business Research

Retail Sales (Arizona) YOY % Change

Retail Sales (in thousands)

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

Eller Business Research

Real Estate Commercial: Office***

Q4 2011

Q4 2010

Vacancy Rate

27.9%

28%

Net Absorption (in SF)

92,786

-100,127

Rental Rates (Class A)

$23.45

$24.72

Commercial: Indust.*** Vacancy Rate

Q4 2011

Q4 2010

12.3%

14.5%

2,853,602

105,408

$0.51

$0.53

Jan. 2012

Jan. 2011

6,374

6,164

Total Median Sale Price

$128,250

$120,000

New Build Sales Volume

447

310

New Median Sale Price

$223,000

$227,233

5,927

5,854

$121,500

$115,000

Residential:

Arizona

Nevada

Unemployment (Dec. 2011)

Rental Rates (General Industrial)

Top 5 Rank

Number

Net Absorption (in SF)

State Performance & Job Quality Scores Our Region

Economic Indicators (Metro Phoenix)

Total Sales Volume

Resale Sales Volume Resale Median Sale Price

* 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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10/25/11 3:29 PM

Enterprise

Risks & Rewards

Don’t Go It Alone

Franchisors and franchisees build business around a proven commodity

by Gremlyn Bradley-Waddell Linda Stanfield felt she had done all she could do with the plumbing business she and her husband and started in the East Valley, and she didn’t like feeling stuck. “We were trying to make strides,” she says, noting they had joined a plumbing association but hadn’t figured out how to advance their company. “We grew as businesspeople, but, like with high school or college, you have to move on to the next level.”

So when the opportunity presented itself for their company to become part of the Benjamin Franklin Plumbing franchise — known for its fleet of recognizable blue trucks with the iconic image of the great inventor on the side and the catchy tag line, “The punctual plumber” — Stanfield took the matter under consideration. While there were points to evaluate and it wasn’t an entirely easy decision, the couple ultimately decided to join the franchise. They kept their customer base; got access to training, marketing and supplies they hadn’t had before; and even saw their newspaper advertising bill dip by 50 percent thanks to a franchise discount. All in all, the results have thrilled them.

“I’d say we tripled our growth in a lot of different ways,” says Stanfield, who even vacations with Benjamin Franklin colleagues and considers other area franchise owners “like brothers and sisters.”

For entrepreneurs with an existing business, like Stanfield, or someone new to the arena, franchising has long presented itself as an enticing option. Of course, as with any business proposition, there are pros and cons to consider and plenty of fine print to read. That said, franchise supporters have a host of reasons as to why being a franchisor or franchisee is the only way to do business these days.

New and Growing Interest in Franchising If anyone knows the industry well, it’s Jeff Jervik, who has worked both as a franchisee, when he worked for Papa John’s Pizza in Hawaii, and as a franchisor in his current position as president and CEO of Fitness Together Holdings, Inc. The parent company owns, among other firms, Elements Therapeutic Massage, a franchise with five locations in

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M a r c h 2012

the Phoenix area, two more in development that are slated to open this year and an additional dozen so planned to open by year’s end.

Jervik, who also served 15 years as the national vice president of operations for Pizza Hut, frequently speaks to business professionals about the industry, which he says has been impacted in recent times because of the way business is done nowadays. For one thing, Jervik says, the structure of the work place has changed significantly. For example, the Colorado-based entrepreneur says, 85 percent of workers during the 20th century were full-time; the other 15 percent were either temporary or part-time. In the 21st century, however, only 50 percent are full-time.

“That’s a big change when you get displaced,” he says, noting the recent economic woes that have left many out of work. “You may not land in a job, and you may not land in a full-time job.”

As a result, franchising has become especially attractive to those who have been displaced in their careers, says Shelly Sun, author of Grow Smart, Risk Less: A Low-Capital Path to Multiplying Your Business through Franchising (and, as owner and CEO of Gurnee, Ill.-based BrightStar Care healthcare staffing franchise, featured last year on the reality show “Undercover Boss”). Sun says the industry is seeing interest from those who have been out work for two or even three years as it becomes apparent that jobs aren’t coming back. “There’s a little bit of reality that, ‘If I’m going to have a good future, I’m going to have to create it myself,’” she says. Much of the success she has created for herself came only after she chose to franchise her business, which had been successful on the local level. The difference is she’s now expanding it internationally.

Franchise Fees While the question of money always pops up early on in discussion about franchising, Sun insists that isn’t the most important matter to consider. “The passion has to be there,” says Sun, who was named the International Franchise Association’s Entrepreneur of the Year for 2009 inbusine ssmag.com

and was also recognized by the Women Presidents Organization and American Express Open as number one in their Top 50 Fastest-Growing Women-Led Organizations in 2011. “You have to understand the need and want to solve it.”

However, cautions Jack Eberenz, owner and president of Phoenixbased Franchise Integration, “The problem is that too many franchisees buy from a purely emotional standpoint, as opposed to a logical, objective approach looking at the potential of the business and the support [from the franchisor].”

Of course, money is a key ingredient of franchising, which, as Jervik points out, is basically a license to use the name and trademark, as well as products and services, of a particular business. Every franchise, therefore, has a franchise fee, and what a buyer gets in return for that fee typically depends upon how much support the franchisee is given before and after the opening of the business, he says. Some fees may run a few thousand dollars; some may be much more. “The franchise fee is always the biggest obstacle for the franchisee to get over,” he adds.

But while newcomers think their hard-earned investment dollars are going right back into the franchise owner’s pocket, that’s not generally the case, Jervik says. In fact, the transaction is almost cost neutral for a good franchisor. Most will invest the money back into the business, making sure that the right infrastructure — everything from the real estate pros who know where the prime locations are to an effective marketing plan that precisely hits its target audience — is in place.

A good franchisor will closely monitor his or her franchisee’s performance and step in with proactive measures if there’s any sign the business is struggling. Communication is key, and a good franchisor keeps the lines of communication open. And, should worse come to worse, a quality franchisor will find the right person for a faltering location and get things turned around. “You don’t want to ruin the reputation of that particular market,” Jervik explains, noting a top-notch franchisor always has to be one step ahead.

Although fees are based upon the franchise concept, Sun says a lower fee doesn’t mean a lesser product. She also says that, due to “the capitallacking environment we’re in” and banks being less than willing to lend, more franchisors are realizing they have to help potential franchisees get access to capital. Although it wasn’t this way even two years ago, Sun says a good franchisor today will have prequalified sources available.

Another source of funding could be rolling a 401(k) into a business purchase, she adds.

In any case, she says anyone considering whether to go the franchise route or the go-it-alone route needs to realize one thing: “Starting on your own will be more expensive.”

Structured Risk From the franchisor’s standpoint, franchising a locally successful business is another avenue for achieving growth in revenues and customers. Notes Sun, it not only allows the businessperson to expand with limited capital and less risk than opening additional locations on one’s own but mitigates the challenge of trying to take one’s great, local business and manage it in an unfamiliar territory.

On the other side of the equation, along with the industry support that Stanfield mentioned earlier, franchise owners can also take comfort in knowing that their risk is structured, Jervik says. A franchise business is a proven business and business model, after all, and every franchisor must have the Franchise Disclosure Document. This document is inbusine ssmag.com

required by the Federal Trade Commission, he notes, and must disclose, among other things, any business owner who has closed or transferred a franchise location and information about how all the franchises are doing financially. “I guess what I’m saying is, there’s no place to hide,” Jervik says.

Sun says some of the larger companies, like an international fastfood chain or a well-known hotel firm, might have a one- or two-page document. Others may have as many as 10 pages. The smaller the company, the more critical the disclosure document is, she adds.

Brand recognition is another bonus of belonging to a franchise, Jervik says. Successful franchisees stay the course to protect the brand, and that bodes well for all involved. The biggest reason some franchisees fail is because they try to tweak the brand or offer a new service or product.

As Jervik says, “The Big Mac has to taste the same at every McDonald’s.”

That said, even though being a successful franchisee typically means strictly adhering to a franchisor’s guidelines, there is some room for leeway. Eberenz says such flexibility depends upon the systems — such as purchasing, supplies and sales — a company has in place. It’s standard, he says, to have about seven to ten key factors that control and protect a franchise’s brand name, make the franchise profitable and keep customers coming back. The quality of raw materials, such as a bistro’s meat and produce or a construction outfit’s finishing nails, would likely be strictly controlled. “And, if you’re running a restaurant, there’s no give on cleanliness,” says Eberenz, who serves on the boards of Realty Executives International and Precision Door Service. “Signage can vary a little, but it has to be exactly the right color and use of the trademark.”

Where there could be some room for give would be, for example, employee uniforms. A Florida-based locksmith company might have standard-issue garments for its warm-weather employees, but a cold-weather franchisee might need to make adjustments to accommodate area conditions. Another area where there’s a lot of latitude for franchisees to explore what works or doesn’t work in their neighborhood is marketing and sales, Eberenz adds. Some franchisees might be great at cold calling potential new customers, for instance, while others shun it. Even if an approach has not been suggested by the franchisor, it may very well be approved in the blink of an eye. “If it gets results, that’s what matters,” Eberenz says.

Other perks simply have to do with economies of scale, Jervik says, which are beneficial to both the franchisor and the franchisee. The more locations one has, the better the pricing that can be had from the distributor and vendors and the more efficient the marketing can become. And as the franchisee, support starts immediately, from finding the right location to getting fair terms on a lease, then moving to finding a qualified contractor who can do the work at the right price in the right amount of time, then getting people trained and opening the doors.

“As a business owner, it’s really difficult to do everything yourself,” says Stanfield, the owner of the East Valley plumbing franchise.

So, it’s really no wonder that franchising is as popular at is. It just makes sense to those with the right backing and skill set. “You feel like you’re in business for yourself,” Jervik says. “But you’re not in business by yourself.”

Benjamin Franklin Plumbing benfranklinplumbingaz.com BrightStar Care brightstarcare.com Fitness Together Holdings, Inc. thewellnessleader.com Franchise Integration franway.com

M a r c h 2012

19

Trickle Up

A View from the Top

John Leonesio: Forging Chains of Success From chains to franchise networks, Leonesio builds by focusing on key industry changes

by Alison Stanton Referring to his decades of experience creating successful businesses, John Leonesio, CEO of The Joint…the chiropractic place, jokingly refers to himself as a “one-trick pony.” His “trick”? Growing four businesses from the idea stage to hundreds of locations around the country.

The key, Leonesio says, is taking specific parts of industries that need to be improved, finding a way to do it, and then sticking with an already-proven business model to make the business grow. “I am not out to change the industry; I’m only changing the way it’s brought to the public by giving them what they want and how it is delivered,” he says. “The concept I know is how to create the successful model and let it get its own momentum, and build up brand recognition.”

Leonesio’s interest in franchises began more than 40 years ago, when he and his brother Frank started their own chain of health clubs called Scandinavian Health Spas. Over time, the duo built up the business to about 40 health clubs, which they sold to Bally Health and Fitness in 1985.

Leonesio stayed with the health club genre for his second endeavor, opening another fitness club in the Valley in 1990 that he named Q, the Sports Club. “I built 20 of them in five years then sold them to 24 Hour Fitness,” he says. “The difference between the chains was that with Q, they were all identical and the

operating system was identical. Q showed me that if you have a successful business model, it can be duplicated over and over.”

His first franchise business came next, but it didn’t start as a franchise idea. He had learned during his time with Q that, for many people, getting a massage was not merely a luxury but rather an important part of their fitness routine. “I realized that people who are into fitness like massages because they can help them recover quicker from their workouts, and I saw a trend developing where people wanted to get massages but they wanted the places to stay open later and on the weekends,” he says. “Price is also always a factor with people, and so if I could also help make massage affordable, I would. I really looked at what the customers wanted.”

In 2002, Leonesio founded Massage Envy, anticipating opening a chain of five or six locations around the Valley. “I wasn’t focusing on franchising at the time, but after six months I explored it as an option.” He decided he wanted to license the locations and teach others how to do the system, so franchising made sense. In six years, he had grown the franchise from idea to a $300 million company with more than 800 licenses awarded. He then sold the company to Natural Wellness USA, Inc. Leonesio’s latest endeavor is The Joint, which was founded in 1999 by Fred Gerretzen,

D.C., in Tucson. Looking to take the concept to the next level, The Joint hired Leonesio as CEO in 2010 due to his success with Massage Envy. He quickly turned the franchise from its faltering growth to an expanding enterprise that now has more than 150 clinics open or in development in multiple states, including Arizona, California and Louisiana. “I’m applying the same core strategies that made Massage Envy so successful, by incorporating chiropractic care into the wellness routine and making it accessible and affordable to everyone.”

Leonesio says he has thoroughly enjoyed his experience in franchises, which he says he has tried to keep as simple as possible so that each franchisee can be successful. Noting that the health clubs didn’t lend themselves well to franchising because they required a substantial investment — each Q location cost about $7.5 million — and were fairly complex to run, he explains that his model for a franchise is a business that is inexpensive and whose operation is fairly easy to teach. “I’m just very enamored with franchises and the concept of helping people fulfill their dreams of opening their own companies.”

The Joint…the chiropractic place thejoint.com

Expanding on a Concept ■■

20

place is to have 1,000 franchises and 500,000 members in 10 years.

As of January this year, The Joint...the chiropractic place has 33 clinics open, 146 awarded and in development and 149 in agreement with Regional Developers. Locations are in Arizona, California, Louisiana, Texas, Colorado, Kansas, Nebraska, Florida, Georgia, South Carolina, Nevada, New Mexico, Missouri and Utah. Another 202 units are under agreement with additional Regional Developers.

M a r c h 2012

■■ Leonesio founded Massage Envy in 2002 and ■■ ■■

sold it to Natural Wellness USA in 2008 with 800 franchise licenses awarded and 350 clinics opened.

Leonesio built twenty Q, the Sports Clubs between 1990 and 1999, when he sold them to 24 Hour Fitness.

Leonesio and his brother grew Scandinavian Health Spas to 40 locations nationwide, and sold the company in 1985 to Bally Health and Fitness.

Photo: The Joint...the chiropractic place

■■ Leonesio’s goal for The Joint…the chiropractic

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It’s a wake-up call as Arizona faces an urgent need for highly skilled workers

Know someone out of work? With the unemployment rate lingering at 8.5 percent nationally, the surprising fact is, in the last six months, a large portion of the 3.5 million job openings across the country have gone unfilled for months. How does this jibe with the reality that 40 percent of the unemployed have been without work for a year or longer?

Blame it on a skills gap. It’s an international problem that has hit the United States hard. And, like everything else about the Great Recession, Arizona’s skills gap issue is magnified even more, especially in the management, science, technology, engineering and manufacturing sectors.

It’s a talent mismatch that has economic and workforce development professionals scrambling to find solutions. Compounding the problem here in Arizona is the fact that the dominant industries prior to 2008 — hospitality, services, tourism and construction inbusine ssmag.com

M a r c h 2012

23

— are being replaced by industries requiring a different and higher-level skill set. And then there’s education. In Arizona, 78 percent of the unemployed have no post-secondary education, and 40 percent of Arizonans over the age of 25 have a high school education or less.

An Alarming Wake-up Call Patrick Burkhart is the assistant director of Maricopa County Human Services Department, Workforce Development Division. He oversees Maricopa Workforce Connections, a program designed to develop a competitive work force and reduce the number of public assistance recipients in Maricopa County. Burkhart’s wake-up call to Arizona’s alarming skills gap issue came in February 2011 when he reviewed the results of a study his office had commissioned through Arizona State University’s Center for Health Information and Research. “It hit me over the head,” he says. “We had been conducting annual studies relating to healthcare, but this time we expanded our questions to get a much broader picture.”

The broader picture jolted Burkhart into action. He immediately went to work to assess just how serious the skills gap problem in Arizona not only is but will be. “On a national level, we tend to be focused on what skills will be in demand 12 to 18 months from now, when we should be looking at five years and beyond. If the present trend continues, by 2020, there will be an excess of 6 million low-skill and low-education workers and a shortage of 1.5 million college-educated workers,” he says.

Industries with the largest skills gap are limping along trying to find qualified workers. A recent McKinsey report revealed that 64 percent of companies surveyed can’t find qualified applicants for management, scientific, engineering and technical positions. In Arizona, 76 percent of Arizona technology companies report that it is either very difficult or somewhat difficult to find qualified applicants for computer science, engineering and technical positions. And the findings of a National Manufacturing Institute survey are just as sobering: 67 percent of employers report a moderate to severe shortage of available qualified workers, and 56 percent expect this shortage to become more severe.

Sherman Jennings is chair of the Governor’s Council on Workforce Policy and Human Resources Site Leader at Boeing. In his role with the GCWP, he provides guidance to the Governor and the state legislature regarding workforce development issues.

He also manages the GCWP’s responsibilities for making policy decisions for the operation of the local workforce system statewide. “This is a critical issue for Arizona’s future. To attempt to quantify it does not address the core issue of why this problem exists

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and, more importantly, what plans are in place and being developed to address the skills gap. The ability to provide ready-to-employ citizens is central to the ability of Arizona to attract and retain employers that will enable Arizona’s future,” Jennings says.

A Work Force of ‘Left Behinds’

In Arizona, the dominant industries prior to 2008 — hospitality, services, tourism and construction — are being replaced by industries requiring a different and higher-level skill set.

Did we mention the fact our work force is aging?

Approximately one-third of our national work force is age 55 or older. Because of current economic conditions, most plan to work past retirement age. But once the economy stabilizes, they will exit in droves.

“Between 2015 and 2020, they are going to vamoose — and all at once,” Burkhart says.

So, who is left behind? It’s a mixed bag of older and younger workers, some of whom are credentialed but not necessarily experienced. Most will have transferable rather than precise skills and experience.

The majority will have a low skill set and little education. Also making up the majority of our work force: people with disabilities, veterans, people with poor credit, long-term unemployed and people with prior legal offenses.

Arizona Public Service is already preparing for a mass exodus of workers who will retire. “Like the rest of the utility industry, APS is facing increased workforce retirements over the next five years,” says Lori Sundberg, APS senior vice president, Human Resources and Ethics. “Today, 25 percent of our employees are eligible to retire, and by 2014, the percentage will jump to 43 percent. At the same time, energy technology continues to evolve, whether we’re talking about renewable energy or smart meters. That means we’re looking for different skills in some areas.” inbusine ssmag.com

Elaine Babcock serves as the vice chair for the GCWP. As manager of the Southern Arizona Human Resources department of Southwest Gas Corporation, she says the skill set required to do jobs has been changing since long before the recession. “If we think about this broadly, our business has changed dramatically over the years using technology. For example, our construction crews have computers on their trucks, and we include computer skills in our recruitment process for construction workers,” she says.

Babcock’s colleague, Betty Gudeman, manages Southwest Gas’s Central Arizona Human Resources division and worries about what will happen when the economy stabilizes. “Once job seekers find their ideal jobs and unemployment rates go down to 4 or 5 percent, we may see a slight shift in the candidates looking for work,” she says.

Developing a Talent Pipeline Back to the “left behinds” — how do we train them so they get into the hiring pipeline?

Barry Broome, president and CEO of the Greater Phoenix Economic Council, says it is important to understand why so many companies are finding it difficult to recruit qualified workers. “Much of the high-end, management-level talent has been absorbed. For those workers who are left behind, there is a lack of understanding what skills are transferable. In addition, there is an insufficient pool of employees having two to five years of specific experience.” He calls Phoenix a high-growth, bigbandwidth market, and notes another challenge is many people are eager to work but are used to high inbusine ssmag.com

“If the present trend continues, by 2020, there will be an excess of 6 million low-skill and loweducation workers and a shortage of 1.5 million collegeeducated workers.”

—Patrick Burkhart

wages for semi-skilled jobs. “This is what happens when the market contracts. We end up with a gap.”

Recognizing that education is vital in solving the skills gap issue, Broome says GPEC is working with other like-minded organizations to evaluate better programs geared at developing a talented pool of skilled workers. “We’re assessing the region’s training programs and placing an emphasis on working with our community colleges. There are more than 260,000 community college students in the Phoenix metropolitan area … among the highest concentration of students in the nation.”

More college graduates will help. By 2018, 61 percent of all jobs in Arizona will require some postsecondary training beyond high school. And within the next 10 years, nearly 170,000 Arizona jobs requiring a Bachelor’s degree will become vacant due to retiring Baby Boomers.

Tom Anderes, Ph.D., is president of the state’s public university governing system, the Arizona Board of Regents, and co-chair of Getting AHEAD (Access to Higher Education And Degrees), a special project that was created three years ago from a $1.5 million grant from the Lumina Foundation for Education. Arizona was one of seven states to receive grant funds. He notes, “The intention is to put universities and colleges in a position to provide a wider array of postsecondary education that is more accessible and affordable. At one time, the U.S. ranked at the top of the world in college completions, but now we’re ranked 12th, and that number continues to drop. In addition, Arizona is substantially behind the U.S. [average] in the number of high school graduates who pursue postsecondary education, ranking 45th nationally.”

The four-year grant has enabled the Getting AHEAD project to develop innovative new partnerships between community colleges and Arizona’s three public universities to fundamentally change the enterprise of higher education so that more residents can complete associate and bachelor’s degrees. “We’re working to open up more pathways for students. All of the community college and university presidents now meet quarterly, whereas there was no vehicle for them to do so in the past,” Dr. Anderes says, adding, “We have also developed performance funding, and advising and career planning is now more student-centered.”

Recognizing the need to start early, Getting AHEAD recently launched a high school online portal, aztransfer.com, that helps students, parents and K-12 administrators and advisors identify the graduation requirements students need to complete in order to be accepted into a university. “It’s a great resource to help young people who may be uncertain about their future or less motivated,” Dr. Anderes says.

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The Getting AHEAD grant has also enabled colleges and universities to create an Enterprise Plan.

“It is broad strategic direction of where we want to go.

There is much more to what we’re trying to do,” Dr. Anderes says. Four goals represent the foundation of the universities’ Enterprise Plan and the basis for the decisions made in the future: access and excellence, research excellence, work force and the community, and productivity. “Increasing access and seeing more residents with a degree will contribute to the growing workforce demands, while increasing our research base will contribute to a stronger economy locally and across the state,” he says. The plan has 32 different metrics that will help assess their progress on the goals while their funding will be driven by university success in attaining annual targets. “Our level of improvement will be transparent and apparent to all those interested in our impact on individuals, communities and the state.”

On the corporate side, more companies in need of skilled labor are increasing their support of education.

APS’s corporate giving is focused on supporting STEM (science, technology, engineering and math) programs throughout Arizona. “We are focusing on building our talent pipelines, planning for retirements, ensuring we identify and transfer critical knowledge and strengthening our capabilities in workforce planning, data and analysis,” Sundberg says. “We want to be able to hire men and women from across Arizona for jobs as line workers, accountants, plant operators, electricians, power engineers, security officers, IT specialists and many more.”

Through the new Arizona Energy Workforce Consortium, the state’s utility companies and electric cooperatives are working with educational and governmental entities to build talent pipelines and create a greater awareness of energy jobs in Arizona. APS also is one of only five utility companies nationwide piloting the Troops to Energy Jobs program, sponsored by the Center for Energy Workforce Development. This program focuses on helping military veterans transition into jobs in the energy industry, offering skills testing, career coaching and an online application process.

“We also are working collaboratively with the Maricopa Community Colleges that offer specialized training for the energy industry. For example, Estrella Mountain Community College works closely with our Palo Verde Nuclear Generating Station and has launched the Get Into Energy Program this semester,” Sundberg says. The program provides scholarships to high school students who want to learn the skills needed for the energy industry. APS also works with Chandler-Gilbert Community College, which offers an Electric Utility Technology Program. In addition, APS sponsors an internship program, and employed

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“Much of the highend, managementlevel talent has been absorbed.

For those workers who are left behind, there is a lack of understanding what skills are transferable.”

—Barry Broome

nearly 100 college students in summer and yearround internships last year.

Boeing is also taking a proactive approach to finding and developing skilled labor. “Education is the key to addressing this critical issue,” says Jennings. “The education system of Arizona needs to be in sync with preparing its students with the current and emerging needs of its present and future employers.” Boeing has increased its outreach efforts at all levels of the education and employment spectrum to include mentoring in math and science at the grade school level, partnerships with local community colleges and universities, and, on the national level, recruiting efforts and university relationships. “We are continuously looking for new solutions to this issue,” he says, citing as examples an apprenticeship Boeing is creating to help close the gap in the skilled-crafts job family and efforts to increase Boeing’s partnerships with local entities to include nonprofits and state entities that can direct new talent to the organization. “Additionally, we are encouraging our employees to utilize their networks to assist in the process of finding the talent that we need for the present and the future.”

Call to Action On a national level, several states have already taken progressive steps to address their skills gap issue. Colorado, Minnesota, Michigan, Connecticut, Pennsylvania, Washington, Mississippi and Massachusetts forged initiatives and are working closely with employers, educators and the work force to overcome their challenges.

“Arizona needs a sector strategy,” Burkhart says.

“As Peter Drucker said, ‘The greatest danger in times of turbulence is not the turbulence; it is to act inbusine ssmag.com

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with yesterday’s logic.’ We can’t continue to operate like we did in the past. It is no longer a buyer’s market for talent, and we need an initiative quickly.”

Burkhart is working to create a regional workforce summit comprised of economic and workforce development leaders; major trade associations; chambers of commerce; leading employers; and human resource, education and political leaders. Summit participants will devise a regional two-part plan addressing a fast-track tactical skills shortage solution and a strategic pipeline solution for the mid-decade retirement bubble. While the summit is still in its initial planning stages, Burkhart encourages those concerned about Arizona’s skills gap to engage with local workforce and economic development groups now so their concerns will be addressed.

Bridging the skills gap is not going to be easy. Nor will it happen overnight. But it will take a team effort and a “can-do” attitude.

“There’s nothing like a challenge to get up in the morning,” Burkhart says.

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WHERE YOUR ORGANIZATION GETS NOTICED!

The Boeing Company boeing.com Getting AHEAD gettingaheadaz.org Governor’s Council on Workforce Policy arizonaworkforceconnection.com/gcwp/council.asp Greater Phoenix Economic Council gpec.org Maricopa Workforce Connections maricopaworkforceconnection.com Southwest Gas Corporation swgas.com

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Bringing together nonprofits and the people who support them Call: 480.481.2002 / Email: Myra@Myragards.com Website: blacktie-arizona.com / Brochure: PromoteYourNonProfit.com

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Communicate

Louder than Words

Ask, Don’t Tell

Power questions help build better business relationships

by Andrew Sobel and Jerold Panas Just a few years ago, globalization was in full swing and the world seemed to be bursting with an infinite supply of business. All this bounty lulled us into taking our customers for granted — until the economy tanked and shattered the illusion of endless prosperity.

Suddenly, the old-fashioned “trusted relationship” started to look good again.

Personal connection, likeability and trustworthiness are today’s new litmus test for doing business. We create these qualities not by knowing the right answers but by knowing the right questions.

Asking questions and letting people come up with their own answers is far more effective than spouting facts or trying to talk someone into something. Telling creates resistance.

Asking creates relationships. Here are nine ways questions can transform professional and personal relationships:

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Questions turn one-dimensional, armslength business relationships into personal relationships that endure for years. When a relationship is all business and there is no real personal connection, it lacks heart and soul. And therefore you are a commodity — a kind of fungible expert-for-hire. A client — or your boss — can trade you out for a new model with no remorse or emotion.

But when you’ve connected personally, the situation is transformed because clients stick with people they like. Bosses hold onto team members they feel passionately about. Your expertise and competence get you in the door, but it’s the personal connection that then builds deep loyalty.

Near the end of a meeting with the CEO of a major client that was being courted by competitors, the senior partner of a consulting firm paused from the briefing and said,

“You’ve had an extraordinary career. You have accomplished so much, starting at the very first rung of the ladder, on the manufacturing floor. As you look ahead, is there something else you’d like to accomplish? Is there a dream you’ve yet to fulfill?” Nearly stunned, the CEO replied, “No one has ever asked me that question. No one.” And then he began talking about a deeply held dream he had for his retirement. That question was the turning point in building a long-term, deeply personal relationship with an influential business leader.

They make the conversation about the other person. Most of us don’t care what other people think — we want to know first if they care about us. The need to be heard is one of the most powerful motivating forces in human nature. “What do you think?” and “Can you tell me more?” are power questions.

When you make the conversation all about you, others may think you are clever.

But you will not build their trust. You will not learn about them. You will squander the opportunity to build the foundations for a rich, long-term relationship.

They cut through the “blah, blah, blah” and create more authentic conversations. No doubt you can relate to this scenario: A person says, “I want to bounce something off you,” then proceeds to spend ten minutes telling you every detail of a very convoluted situation he is enmeshed in. You do yourself and the other person a favor by getting him to focus on the true kernel of his issue. Simply ask: What is your question?

This is a tough-love question. People will resist it — often strenuously. But asking it forces them to take the first step toward clarifying what the issue is and what advice they really need from you.

They help people clarify their thinking.

Instead of saying, “We need to improve our customer service!” ask, “How would you assess our customer service levels today?” or “How is our service impacting our customer retention?” If someone at work says, “We need more innovation,” ask, “Can you describe what innovation means to you? How would we know if we had more of it?” Or if there is a call for more teamwork, ask, “What do you mean when you say ‘teamwork’?”

They help you zero in on what matters most to the other person. The next time you’re talking to someone and realize you’ve “lost” her — she’s fidgeting, she’s stopped asking questions, maybe she’s sneaking glances at inbusine ssmag.com

Books

Books on Bettering Business

the clock — ask, “What is the most important thing we should be discussing today?” You will instantly connect with what really matters to her, and the conversation that ensues will help her see you as relevant and valuable. In business it’s critical to be seen as advancing the other person’s agenda of essential priorities and goals.

They help others tap into their essential passion for their work.

One of the highest-impact power questions you can ask is, “Why do you do what you do?” It grabs people by the heart and motivates them. When they seriously consider and answer this question, the room will light up with passion. Dull meetings will transform into sessions that pop with energy and generate ideas that vault over bureaucratic hurdles and create real impact.

They inspire people to work at a higher level. The late Steve Jobs was notorious for pushing employees. He asked people constantly, “Is this the best you can do?” It’s a question that infused Apple’s corporate culture from the beginning. It’s one that helped revolutionize the desktop computing, music and cellular phone industries. And it’s one that you can use too — sparingly and carefully — when you need someone to stretch their limits and do their very best work.

They can save you from making a fool of yourself. Before responding to a request or answering someone’s question to you, it’s often wise to get more information about what the other person really wants. When a potential employer says, “Tell me about yourself,” you can bore them to tears by rambling on and on about your life — or you could respond by asking, “What would you like to know about me?” When a prospect asks, “Can you tell me about your firm?” the same dynamic applies. Most people go on and on about their company, but the client is usually interested in one particular aspect of your business, not how many offices you have in Europe.

They can salvage a disastrous conversation. It happens all the time in business — and at home — that interactions get off on the wrong foot and someone gets angry or offended or just shuts down. But people are forgiving. They want to have a great conversation with you.

Asking, “Do you mind if we start over?” will disarm the other person and make him smile. That smile will ease the way to a new beginning.

All business interactions are human interactions, and part of being human is acknowledging that you don’t know everything about everything — and that you certainly don’t know everything about the other person and her needs. Questions help you understand these things more deeply. The right questions unleash a cascade of innermost feelings and vibrant conversations. They help you bypass what’s irrelevant and get straight to what’s truly meaningful. They make people like you, trust you and want to work with you.

The Instant Survivor: Right Ways to Respond When Things Go Wrong When a person is distracted by professional and personal crises, he or she works less productively, delivers poor results and suffers from poor health. Yet employees and their managers are not equipped to effectively resolve these crises. As a partner in a leading Washington law firm, crisis-management veteran Jim Moorhead has spent decades helping Fortune 500 companies and individuals survive crises, and now offers a simple, actionable process based on proven business practices that will enable managers to resolve personal crises at any level of any organization.

Andrew Sobel and Jerold Panas are co-authors of Power Questions: Build

The Loyalty Leap: Turning Customer Information into Customer Intimacy Bryan Pearson draws on more than 20 years of first-hand experience in building emotional loyalty in an information age, with insightful stories from the trenches of the data-gathering and marketing communications fields. While other business books address customer service and data as the abstract fruit of technology, his new book reveals how shopper data can be used as the cornerstone upon which to build intimate customer relationships, leading to profitable growth in the new era of marketing.

Relationships, Win New Business, and Influence Others. andrewsobel.com • jeroldpanas.com

Executive educator, coach and top-level management consultant, Andrew Sobel has worked with leading corporations such as Citigroup and professional service firms such as Ernst & Young. In addition to numerous books, he has authored articles that have been featured in a variety of publications such as The New York Times, Business Week and Harvard Business Review.

Jerold Panas is executive partner of Jerold Panas, Linzy & Partners, a fundraising services and financial resource development firm whose clients comprise many of the foremost not-for-profit institutions in the world; founder and chairman of the board of the Institute for Charitable Giving, one of the most significant providers of training in philanthropy; a noted author on the subject as well as a regular contributor to professional journals.

inbusine ssmag.com

Jim Moorhead $19.95 • Greenleaf Book Group • On shelves and online

The Power of Habit: Why We Do What We Do in Life and Business The New York Times business reporter Charles Duhigg takes us to the edge of scientific discoveries that explain why habits exist and how they can be changed.

Learn why some people and companies struggle to change, despite years of trying, while others seem to remake themselves overnight. Visit laboratories where neuroscientists explore how habits work and where, exactly, they reside in our brains. Discover how the right habits were crucial to the success of Olympic swimmer Michael Phelps, Starbucks CEO Howard Schultz and civil rights hero Martin Luther King Jr. Charles Duhigg $16.46 • Random House • On shelves and online

The 20% Doctrine: How Tinkering, Goofing Off, and Breaking the Rules at Work Drive Success in Business Gawker tech-blogger and journalist Ryan Tate reveals how businesses can inspire greater creativity and productivity by making small, specific changes to how work time is approached within their corporate cultures and allowing their employees to pursue their own passions at work. The concept of “20% Time” originated at Google, but Tate takes examples from all around the business world, including Flickr and The Huffington Post, to demonstrate how flexibility and experimentation can revolutionize any business model.

Ryan Tate $16.97 • HarperCollins • April 2012

Bryan Pearson $16.95 • Portfolio Hardcover • May 2012

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NonProfit

by Alison Stanton

Investing in Community

Hospice of the Valley: Providing Comfort and Care to Patients For 35 years, Hospice of the Valley has provided end-of-life care to patients with life-limiting illnesses and support to their families. The nonprofit organization’s mission statement is “Bringing comfort and dignity as life nears its end.”

Hospice of the Valley’s main source of funding is Medicare, says executive director Susan Levine. In addition to hospice care, these dollars help pay for staffing, medications, equipment and facilities. But donations and grants are the chief funding for the recently established Arizona Palliative Home Care, which cares for the seriously ill who are struggling with daily living and disease management. And the donorfunded Helping Hands fund takes care of emergency needs of patients and families, which could be help paying the rent or a utility bill or buying a plane ticket to reunite a patient and family member. “Our not-for-profit agency relies on donations to care for people without insurance or the financial ability to pay,” she says. “Donations also pay for services not covered by insurance, such as pet, music and massage therapy and some pediatric services.”

Charity care expenses grew by 16 percent from 2009 to 2010, Levine says, reaching more than $11 million. No one was denied service through Hospice of the Valley because of an inability to pay.

Hospice of the Valley hov.org

■■ EVENT: Hospice of the Valley’s CIGNA Pro-Am Golf Tournament on April 5 at Grayhawk Golf Club.

■■ With about 1,700 employees — including an on-duty staff — and 2,500 volunteers, Hospice of the Valley provides 24/7 care.

■■ Hospice care is provided mainly at home by a team comprised of a ■■ ■■

doctor, nurse, social worker, nurse’s aide, chaplain (if requested) and volunteer.

Hospice care does not cost the patient anything out of pocket.

Sixteen palliative care units Valley-wide offer inpatient hospice care for limited periods of time.

■■ EVENT: 97th Annual Charity Ball, April 21, at Camelback Inn Resort and Spa, Phoenix.

■■ Two part-time staff members, 50 active members and 130 associate members work at the nonprofit organization.

■■ The active members organize the annual charity ball and Care Card fundraisers, and the associate members run the annual fashion show.

■■ The 2012 Care Card will benefit UMOM New Day Centers.

■■ A limited amount of additional donations is given by attendees of the events.

For more than 100 years, The Board of Visitors has made contributions to the healthcare needs of women, children and the elderly throughout the Phoenix metropolitan area. According to its website, it is the oldest charitable organization in the state.

“We … determine allocation and distribution of funds to those nonprofits who meet our mission statement,” says Mary Ann Sheely, chairman of The Board of Visitors, adding that charities may apply for a grant directly through the Board of Visitors website.

The Board of Visitors relies on three fundraisers a year to raise money: an annual Charity Ball in the spring, sales of a Care Card in the fall — the card, which sells for $50, allows shoppers to save 20 percent on purchases for about 10 days at more than 700 participating retailers — and an annual fashion show and luncheon in December.

Since 1995, the nonprofit organization has contributed $14 million to local charities. Sheely says that last year’s budget was close to $1 million, the vast majority of which was donated to local nonprofits.

“We are really proud to keep our operating expenses at less than 10 percent,” she says.

The Board of Visitors boardofvisitors.org

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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inbusine ssmag.com

Photos: H ospice of the Valley (top), The Board of Visitors (bottom)

The Board of Visitors: Funding Healthcare Needs of the Community

www.inbusinessmag.com

March 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.

Arizona Small Business Association

Business Development Series economic club of phoenix

Economic Club of Phoenix

Business Luncheon

Tues., March 13 — 11:30a – 1:30p Long recognized as the place to meet national and international leaders in business, the Economic Club of Phoenix’s monthly luncheons have included CEOs from Southwest Airlines to the Ford Motor Company who have taken the stage to share with local executives their wealth of experience. At this month’s luncheon, which will be held at the Westin Kierland Resort & Spa in Scottsdale, the featured speaker is Doug Parker, chairman and CEO of US Airways.

US Airways Group has been one of the largest employers in Arizona since its merger in 2005 with America West Airlines. Parker, who had joined America West as senior VP and CFO in 1995 and been elected chairman, president and CEO in 2001, became chairman and CEO of US Airways after the America West/US Airways merger. He has 25 years of airline industry experience.

The Economic Club of Phoenix continues to drive the collective power of Arizona business.

Through local networking, exposure to national and international industry icons, and access to the leadership and knowledge of Arizona State University’s W. P. Carey School of Business, this pre-eminent forum was created to foster discussion of economic issues amongst academic, business, labor and public sectors in the Phoenix area and is an essential resource for every Valley business leader. Luncheon fee for Economic Club of Phoenix members varies with their type of membership; for non-members, the cost is $75. Advance registration is required.

—RaeAnne Marsh Economic Club of Phoenix econclubphx.org

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Six-week series in April and May, morning and evening sessions Presenting the series at its Business Education Center in Phoenix, ASBA kicks it off with a “Process of Business Development” overview offered three times in March — on the 1st, 15th and 29th, from 8 a.m. to noon. The series itself begins on Thursday, April 5, for the evening sessions (5 p.m. to 8 p.m.) and on Friday, April 6, for the morning ones (8 a.m. to 11 a.m.).

Businesspeople may attend the overview to become acquainted with the type of content that will be covered in the series’ sessions, or may sign up directly for the series.

The program is designed for companies that are on the cusp of opening, or even still in the idea phase, as well as those that have been in business for a while and are stalled in growth, explains Kristen Wilson, ASBA chief operating officer. “We saw a need [among the businesspeople] applying for our mentoring programs,” she says. The sessions will walk business owners through the six areas of running a business: business organization, market analysis, sales strategy, financial overview, KPI (key performance indicators) development and business implementation processes. Not only will the program enable participants to construct at least the framework for a business plan, but the final session will include the opportunity to meet with ACCION, National Bank of Arizona and other financial organizations that are lending to small business.

The sessions will be conducted by business analyst Jerone Davis, of Business Development Network, who will also bring in experts in specific subject matter, such as marketing, sales, law and accounting. Davis has been working with businesses in Tucson for 10 years and has teamed with ASBA as its in-house business development consultant to offer this program in Phoenix.

—RaeAnne Marsh Arizona Small Business Association asba.com

Notable Dates This Month Sat., March 17

St. Patrick’s Day

Tues., March 20

Vernal Equinox

Fri., March 30

César Chávez Day (observed)

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.

M a r c h 2012

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O n t h e Ag e n d a ASSOCIATION FOR CORPORATE GROWTH — ARIZONA March Breakfast featuring Betsy Bayless Tues., March 13 7:00a – 9:00a

Members and sponsors: $49; nonmembers: $69; at the door: add $10 Arizona Biltmore Resort & Spa 2400 E. Missouri Ave., Phoenix acg.org/arizona

ARIZONA CHAMBER OF COMMERCE & INDUSTRY Arizona Heritage Award Dinner Fri., March 2 6:00p registration; 7:00p dinner

Members: $250, non-members: $300 Frank Kush Field Sun Devil Stadium at ASU, Tempe azchamber.com

ARIZONA HISPANIC CHAMBER OF COMMERCE Buenos Dias

Tues., March 13 8:00a – 9:30a

Members: free; non-members: free with RSVP by March 12, $10 at the door The Better Business Bureau 4428 N. 12th St., Phoenix azhcc.com

ARIZONA SMALL BUSINESS ASSOCIATION The Process of Business Development Thursdays, March 1, 15, 29 8:00a - noon

This seminar consists of a four-hour presentation and one hour business review process for each client. This assists start-up and existing business owners to create a realistic overview of a new business model or integrate a new function into their existing business.

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

Creating Your Effective Networking Commercial Tues., March 13 2:00p – 3:00p

Get customized pointers on ways you can develop an effective 30-second networking commercial in this hands-on workshop. Facilitated by Mike Leeds, Pro Sales Coaching.

Members: free; non-members: $10 ASBA’s Business Education Center 4600 E. Washington St., Phoenix asba.com/events

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March 2012

Business Development (Six Part Series – PM)

Thursdays, April 5 – May 10 5:00p – 8:00p

This is a six-week, comprehensive workshop for starting and growing your business. Topics: business organization, market analysis, sales strategy, financial overview, KPI (key performance indicators) development and business implementation process.

Members: $225; non-members: $275 ASBA’s Business Education Center 4600 E. Washington St., Phoenix asba.com/events (See article on page 31.)

Business Development (Six Part Series – AM)

Fridays, April 6 – May 11 8:00a – 11:00a

This is a six-week, comprehensive workshop for starting and growing your business. Topics: business organization, market analysis, sales strategy, financial overview, KPI (key performance indicators) development and business implementation process.

Members: $225; non-members: $275 ASBA’s Business Education Center 4600 E. Washington St., Phoenix asba.com/events (See article on page 31.)

ARIZONA TECHNOLOGY COUNCIL Lunch and Learn: Becoming a Better Strategic Thinker Tues., March 6 11:30a – 1:00p

Directed at professionals and managers who contribute to the development or execution of functional strategies.

Presented by Adaptive Strategies.

Members: free; non-members: $15.

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

Lunch and Learn: Tips on Matching the Candidate to the Job Tues., March 13 11:30a – 1:00p

New ways of hiring, developing and retaining superior performers as well as data from real-world experiences.

Presented by SHERPA & Associates.

Members, free; non-members: $15.

TTI 17785 N. Pacesetter Way, Scottsdale aztechcouncil.org

Arizona Health & Medical Technology Expo Thurs., April 5 12:30p – 6:30p

A focus on cutting-edge healthcare topics and the latest advanced technology in the medical field.

Members, $20; non-members: $30 (includes two drink tickets during reception).

Hilton Scottsdale Resort & Spa 6333 N. Scottsdale Rd., Scottsdale aztechcouncil.org

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

CENTRAL PHOENIX WOMEN Monthly Luncheon Mon., March 5 11:30a – 1:00p

Yuval Yisrael, Microsoft Corporation, will present Today’s Mobile Interaction Technology. $75 The Ritz-Carlton, Phoenix 2401 E. Camelback Rd., Phoenix centralphoenixwomen.org

CHANDLER CHAMBER OF COMMERCE Employers’ Seminar Series Tues., March 27 8:00a – 9:15a

Topic: “Do Your Employees Have to Study to Pass a Drug Test or Other Employment Tests?”

Members: $5; non-members: $10 Chandler Chamber of Commerce 25 S. Arizona Pl., Chandler chandlerchamber.com

Economic Update Forum Luncheon Wed., March 28 11:30a – 1:30p

Topics: City of Chandler update presented by the City of Chandler’s Economic Development Department, and “Generational Change: Back to the Future — How to Perceive the Next 20 Years” presented by Wayne Strutzer, Senior Vice President-Advisor Consulting Group, RBC Wealth Management.

Members: $20; non-members: $25 Hilton Phoenix/Chandler 2929 W. Frye Rd., Chandler chandlerchamber.com

ECONOMIC CLUB OF PHOENIX March Luncheon Tues., March 13 11:30a – 1:30p

Speaker: Doug Parker, chairman and CEO of US Airways.

Members: fee varies with membership; non-members: $75; advance registration is required.

The Westin Kierland Resort & Spa 6902 E. Greenway Pkwy., Scottsdale econclubphx.org (See article on page 31.)

GREATER PHOENIX CHAMBER OF COMMERCE Phoenix Forum: History as a Source of Strength Wed., March 7 11:30a – 1:00p

Speaker: David McCullough $75 Sheraton Phoenix Downtown Hotel 340 N. 3rd St., Phoenix phoenixchamber.com

NATIONAL ASSOCIATION OF WOMEN BUSINESS OWNERS NAWBO University Wed., March 14 9:30a – 11:00a

Start with “Why?”: How to build a memorable brand and stand out in a crowd.

Members: free; non-members: $30 Phoenix Country Club 2901 N. 7th St., Phoenix nawbophx.org

Networking Luncheon Wed., March 14 10:45a – 1:00p

“Direct Your Energy to Succeed at Life and Work!”

Members: $38 by March 9, $53 by March 11; non-members: $48 by March 9, $63

by March 11 Phoenix Country Club 2901 N. 7th St., Phoenix nawbophx.org

PEORIA CHAMBER OF COMMERCE Facebook Seminar for New Users Wed., March 7 11:00a – 1:00p

Bring your own laptop with wireless to this interactive seminar. You will leave with a solid understanding of how to implement Facebook as a social media strategy for your business. Instructor: Michael Simpson. $20 (includes lunch) City of Peoria, Point of View Room Development and Community Services Bldg 9875 N. 85th Ave., Peoria peoriachamber.com

SCOTTSDALE AREA CHAMBER OF COMMERCE Airpark Tradeshow Thurs., March 8 3:00p – 7:00p

Free Monterra at WestWorld 16601 N. Pima Rd., Scottsdale Calleen Sorensen, (480) 949-6282

Scottsdale’s History Hall of Fame Dinner Fri., March 23 5:30p – 9:00p

The Past President’s Council of the Scottsdale Area Chamber of Commerce honors four individuals and one not-forprofit organization $60 Chaparral Suites Resort 5001 N. Scottsdale Rd., Scottsdale Leslie Nyquist, (480) 949-2174

inbusine ssmag.com

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

SURPRISE REGIONAL CHAMBER OF COMMERCE

BUSINESS EVENTS

Hot Topics and Lunch: ASU President Michael Crow

Global Business Fun and Funding

Thurs., March 15 11:30a – 1:00p

Spirit of Community Awards Banquet Fri., March 9 6:00p – 10:00p

Now more than ever, thriving local businesses will lead the way as our regional and national economy gets back on the path to recovery.

Recognizing and celebrating our local businesses and their leaders is an exciting part of this process. $75 The Colonnade 19116 Colonnade Way, Surprise Mary Orta, (623) 583-0692

TEMPE CHAMBER OF COMMERCE State of the District: A Federal Update with Congressman David Schweikert Mon., March 12 7:00a – 9:00a.

Congressman Schweikert will share his vision for the future of our district, state and country.

Members: $55; non-members: $65 Conference Center at Rio Salado College 2323 W. 14th St., Tempe Sachiyo Ragsdale, (480) 967-7891

Mon., March 5 7:30a – 9:00a

ASU President Michael Crow joins us to discuss how one of the nation’s largest colleges intends to maintain a pivotal role in the community.

Members: $25; non-members: $35 Four Points by Sheraton Tempe 1333 S. Rural Rd., Tempe Sachiyo Ragsdale, (480) 967-7891

Discussion of opportunities for U.S. businesses to grow exports features experts Kevin O’Shea, Arizona Commerce Authority; Pellson Lau, U.S. Small Business Administration; and Doug Bruhnke, Growth Nation. $20 ($25 at the door) SkySong 1475 N. Scottsdale Rd., Scottsdale growthnation.com/azigg/upcoming-events

WEST VALLEY WOMEN Spotlight Our Members Luncheon

Come prepared with your questions, as this will be 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 Scottsdale Microsoft Store 7014 E. Camelback Rd., Scottsdale scottsdaleevents@microsoft.com

WOMEN OF SCOTTSDALE Monthly Luncheon Fri., March 16 11:30a – 1:00p

THRIVE! Endorsement Event with Arizona Sci-Tech Festival

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

Thurs., March 22 2:00p – 3:30p, 3:30p – 5:00p

Free Scottsdale Microsoft Store 7014 E. Camelback Rd., Scottsdale scottsdaleevents@microsoft.com Thurs. – Sun., March 22 – 25

Thurs., March 8 8:30a – 10:00a

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

Computer Technology Conference Workshops

Computer Technology Conference

Business Professionals Breakfast

Tues., March 6 11:30a – 1:00p

technology for small business through relationship and video marketing.

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

Thurs., March 15 7:00p – 8:30p

An innovative event integrating the spirit of community, collaboration and

$125 Radisson Fort McDowell Resort & Casino 10438 N. Fort McDowell Rd., Scottsdale comptechconf.com

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.

SAVE THE DATE Celebrate the Best in Business Tuesday, May 1, 2012 | Arizona Biltmore

19th Annual

ENTERPRISE B

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S

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A W A

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luncheon

presented by

Visit asba.com/bestinbusiness inbusine ssmag.com

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Education

Series on Branding

Systems … or How to Make the Perfect Latte

by Kathy Heasley

How is it that a grande caramel latte in Phoenix tastes just like the one you had in Columbus which tasted just like the one you had in Chattanooga? How does Starbucks do it? How do any of the big brands manage to keep such consistency from one location to the next, whether it’s across town or around the globe? The answer is “systems” and it is the fifth stage in this Heart & Mind Branding series.

You will recall from previous articles in this series that great brands first must find their heart, their reason for being. Then they just put it into words; that’s the message stage. Next they must translate those words into images, and from there to actions. But it is the final stage, the systems stage, that holds it all together.

More Beneficial than You Know Too many businesspeople believe the primary reason to have systems within a company is to create efficiency that lowers costs, delivers a competitive advantage and increases profits. Those are great reasons to systematize your business. But a bigger reason, one that will deliver all those advantages and more, is simply that a consistently wonderful brand experience will keep customers coming back and, even better, telling others about you — and that response is what builds your bottom line.

Setting up systems isn’t just for the big guys and it’s not just for a consumer products company, retailer or restaurant chain; it’s for every business. In fact, systematizing your business is the most critical item on your to-do list. It makes everything easier and stops problems before they start.

It wasn’t too long ago that we were working with a client that was having customer service issues. The company was also having employee issues and its leaders wanted to get people in their company on board and grow their business. When we looked at their company, what we found was a brand that was lacking in both the promise and the experience — those two words that define a brand. But the company also had no systems. One person in the field was doing things her way while another was doing them his way and so on. Multiply this by twentythree, the number of outside consultants the company has, and you have

not only chaos but no brand consistency.

Some clients loved the company’s work.

Others felt it was so-so. And still others were unhappy, which cost the company money and hurt its reputation. It was clear the company needed to define its actions in stage four and then systematize them fast before suffering any more damage.

After defining the company’s brand experience, we worked with the company, its leaders and employees to systematize it. We also put systems in place so that promoting the new brand was manageable, too. That included systematizing the blogging, social media, public relations, et cetera so everyone would be consistent on the promise side of the brand equation, too.

You Can Systematize Part of the solution comes from experience and seeing the patterns of need. Wisdom goes a long way in establishing a brand’s systems. But so does discovering best practices by talking with company employees and customers to find out what’s working, why it’s working and what they love about it. Finally, it’s knowing the tools that make the system efficient. No one likes busy work.

Any company, even a company of one, that wants to build a positive reputation in the marketplace (and who doesn’t?) is wise to pay attention to building systems for every process. People always ask us, “When is the right time to brand?” Our answer: Immediately! It is never too early. You’re branding yourself unintentionally if you are not doing it intentionally. Why not own it?

Systems are the secret to creating and building a great brand that people choose, that they recommend and that they love. Starbucks developed its systems with store number one. Smart move. It’s why we can count on a consistent cup of coffee no matter where we are in the world. It’s why we can recognize its brand and feel a sense of comfort no matter which location we visit for our coffee fix. Starbucks is a strong brand not because it has the best coffee; taste is a matter of opinion.

Starbucks is a strong brand because it has consistency — because it has systems.

The “Heart & Mind Branding” series takes business owners through the steps to

Heart & Mind Branding — the Education Series consciously address improvements to their company’s success by implementing an integrated approach to branding. In Business Magazine presents the six-part series:

Intro

Heart

Message

Image

Actions

Systems

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

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Heasley & Partners, Inc. heasleyandpartners.com

Kathy Heasley is founder and principal of Heasley & Partners, Inc., a branding company that helps organizations grow and prosper. She’s the creator of Heart & Mind® Branding, a Rich Dad Advisor, author of multiple books and CDs, and international marketing and communications coach.

inbusine ssmag.com

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Education

Series on Growing Revenues

Building Your Sales Team Correctly

By Mike Toney

Building the right sales team will propel a company to success; building it incorrectly will create mediocrity or, worse, send it to bankruptcy. It’s important to be aware, when building the sales team, of the different selling styles and how they fit — or don’t fit — your company’s product or service.

Business Types and Selling Styles

Each quadrant represents different selling style and skills needed for the company. Determine which of these four quadrants characterizes your company’s product or service:

Expensive NONcritical NOT Expensive NONcritical

Expensive Critical

NOT Expensive Critical

Selling styles While every company needs to sell what they do, not every company needs a salesperson or sales team. If your company is the type that does, then the first step is to look at is the selling style that fits your business. Your company can change quadrants (e.g., style and skills; see chart above) over time based on its maturation in its life cycle or the ease of doing business with technology. Hiring the person with skills from the wrong quadrant can create chaos or brand corruption, or ruin a team or company.

NOT Expensive, NON-critical: Items in this quadrant are viewed as commodities; selling is about price, availability and competitive issues. Success typically comes from being able to discount to beat the competition or having the hottest brand. Skills that work well here don’t translate well into other quadrants because they are based on a structured approach and system.

Expensive, NON-critical: Items in this quadrant are viewed as utilitarian services or products; selling is about safety, image

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or reducing risk. Examples range from life insurance to pricey home décor items. However, an item that fits into this bucket may slide into “Expensive, Critical” if safety or risk is imminent for the buyer — which would require a different selling approach and different sales skills.

NOT Expensive, Critical: Items in this quadrant are viewed as high-value products or services that solve an immediate problem.

Businesses in this category, such as consulting, website development and marketing, require sales skills that are very market or domain specific along with elements of problem solving to ensure fit. Also, an item that was neither expensive nor critical could fall here in some circumstances, such as a gallon of gas needed to travel for an unexpected, urgent meeting or chore. A salesperson with a good sales method and skill set can remove competitive and pricing issues by discovering the criticality of the moment for the buyer.

Expensive, Critical: Items in this quadrant are viewed as value-added products or services that provide solutions and minimize risk, from outsourced manufacturing to talent management to customized products and services. Salespeople with the style, strategy and systems to do well in this quadrant can sell in any quadrant. This sales professional can use questioning as a tool to guide a prospect to the solution, and the prospect will think he thought of it himself.

Understanding these simple distinctions gives you the edge, when hiring someone, to explore job fit. Someone with a commodity mindset (bottom left) could present himself as a strategic professional (top right), so you must be equipped to get behind the candidate’s interview “mask.” Following are four common defects in the interview process.

• Subjectivity: The hiring process is missing objective measures. In this case,

the interviewer’s assessment is based on impressions rather than reason. Measurement tools and assessments that use double blind input prevent the interviewee from gaming the process. Predictive Index and The Devine Group’s CoreTeam TM ScoreCard are among the effective tools that are available.

• Emotional Attachment: Falling in love with a person because they are like you or not like you. A hiring manager may become “emotionally attached” and lose objectivity, a situation that sometimes happens because there is a desperate need to hire and fill the position.

Make time your friend when hiring and take it slowly; it exposes things otherwise not seen.

• Weak interviewing: Lacking skills to reveal the real person, not the person the interviewee wants to show. The manager or interviewer needs tools beyond “behavioral” questioning to determine if someone is telling the truth or not; a gut feeling that there is a problem is not sufficient if the interviewer does not have the questioning skill to test the candidate’s authenticity.

• Undefined job metrics and accountability: Proper sales structures needed to determine a candidate’s job fit are missing. If a salesperson is required to prospect two hours a day, what are the measurable outcomes expected of him during that time? What questions can you ask a candidate to see if he can produce that result?

Then how can you be sure he can do it?

Our final article will explore interviewing and hiring strategies to select the best candidates.

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

“We must view education as an investment, not an expense.”

SHELLEY ESQUE Vice President, Intel

The education we provide for Arizona’s children will determine the kind of future we all enjoy. Arizona employers need a highly skilled, talented workforce to diversify our economy, increase job opportunities and stay competitive.That requires a stronger education system that begins at birth and continues through career.

By investing time, talent and money to improve education today, we better position Arizona for long-term success. In the end, we all benefit. Education is everyone’s business. Make it your priority.

Visit ExpectMoreArizona.org.

ASSETS

by Mike Hunter

We Value What We Own

Crossing Over: The BMW X6 M Excels Meeting the road with this muscle crossover brings the SUV experience and the BMW European sports car styling together.

The BMW X6 M series is a slick, all-occasion vehicle that makes for a unique option for the businessperson who doubles as the carpooler.

Calling it a Sports Activity Vehicle, BMW gives it the styling of a four-door cabin with a hatchback that provides a spacious rear area meant to be convenient to load and unload.

Getting there will be quick with the V8 4.4-liter twin-turbocharged DOHC engine pulling a full 555 horsepower at 6,000 rpm. Getting off the line will impress with 500 ft-lb of torque meant to move you. The xDrive all-wheel-drive system is amped up with stiffer suspension that performs well, making the sporty seats a necessity. Braking is quick, with a clocked stop from 60 mph in 106 feet. This is an all-time best for an SUV crossover.

The interior is what one can expect from BMW, with sporty dual-toned leather sport seats.

In 2012, an iPod/USB port, heated front seats and auto-dimming mirrors come standard. New, easier-to-use navigation and electronic controls are mounted dead center on the dash and managed with touch-screen technology or the “mouse” in the center console. Front and rear spacing allows for comfort and roominess. Built-in Bluetooth telecommunication technology is standard and works better than any system we’ve seen, with convenience steering-wheel controls and well-defined sound. New for 2012, smart BMW software integrates navigation, telephonics and the entertainment system well.

With limited production of this “hulky” BMW X6 M crossover, the BMW X6 M series may be a rarity City MPG . . . . . . . . . . . . . . . . . . . . . . . . . . 12 on the road, but it is a sports car enthusiast’s Hwy MPG. . . . . . . . . . . . . . . . . . . . . . . . . . 17 dream SUV that will not disappoint.

0-60 MPH. . . . . . . . . . . . . . . . . . . . . 4.0 sec Transmission. . . . . 6-speed automatic MSRP. . . . . . . . . . . . . . . . . . . . . . . . $90,300

Get Protected Business is run on our computers. Safely protecting these machines has become vital to business. We are paralyzed when they are not functioning to our expectations, affecting speed and workability. To avoid the cascade of issues from viruses, spyware, worms, rootkits, keyloggers, trojans and adware, here are our picks for top-rated software programs for PCs.

AVG Anti-Virus 2012 Rated reliable for removal of malware and solid protection of phishing and exploits, this anti-virus has a free version (for personal use) that’s rated better than most paid software options, plus paid options for securing emails, downloads and more.

Full version $54.99 AVG Technologies avg.com

Norton AntiVirus 2012 This software was a best pick by PC Magazine, which tested its malware blocking and removal and its ability to keep systems clean. New for 2012 are affordability and changes that make the program easier to use. $39.95

BMW bmwusa.com

Norton by Symantec

Webroot SecureAnywhere AntiVirus Latest version has a new approach that makes scanning faster and reliability probable.

The software is great at cleaning up malwareinfested systems.

Scoring perfect scores in most tests, this may be a perfect anti-virus product. $39.95 Webroot webroot.com

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Photos: BMW USA (left), AVG Technologies, Symantec, Webroot (right, top to bottom)

norton.com

by Mike Hunter

Power Lunch Midday Hot Spots

Meals that matter

These Valley hot spots may be worth becoming a regular at for lunch. They are hip, have great food, and will impress that client. These hot spots include easy parking (or valet), easy-to-get seating (especially for the known regular) and menus that are perfect for large or small groups.

Caffe Boa Tempe

Quaint and charming, almost reminiscent of Melrose Avenue in Los Angeles, this place is frequented by creative businesspeople and those who know great food. It offers a selection of fresh-made pastas, antipasti and paninis. Artisan cheeses can be chosen a la carte or for the table.

398 S. Mill Ave., Tempe (480) 968-9112 • cafeboa.com

Postino Arcadia Phoenix

The culmination of two veteran Valley restaurateurs’ efforts, Cask 63 recently opened to acclaim in Scottsdale. Co-owners Brian Feirstein, executive chef, and Jerry Tingle, general manager, team up to provide what Tingle describes as “a warm, comfortable neighborhood restaurant environment paired with superior service, extraordinary cuisine and great value.”

Cask 63 American Eatery & Wine Bar is a perfect spot to end the day and take on a flight of wine. The room is sophisticated, with half-moon booths and tables to compliment them, creating an effect reminiscent of a 1930s Hollywood hot spot. With modern hints here and there, smart service and a tasteful menu, this is a safe bet to take that biggest of clients. However, the wine list and décor are mere embellishments to the fare, and lunch is something not to be missed.

Soups and salads may start as options, but true foodies will graduate to the Rainbow Trout, the Brisket Burger or the Tagliatelle. Salads are traditional in name only. The Baby Iceberg “Wedge” is updated for today’s tastes with Heirloom tomatoes and Neuske’s Bacon dressed with a Shaft Blue Cheese Vinaigrette not to forget. From the Warm Brie platter to the light and flavorful Cask 63 Caesar, all choices are prepared perfectly and delivered tableside with confidence. Add roasted chicken, grilled shrimp, crisp calamari or grilled Scottish salmon to any salad.

Chef Feirstein’s creations will perk up that lunchtime meal, whether it is a special occasion or a meaningful meeting of the minds. His use of local and regional ingredients from high-quality purveyors has led to many fresh and inventive dishes.

Cask 63 American Eatery & Wine Bar

St. Francis Phoenix

At this establishment specializing in wood-fired cuisine, lunch-goers will love the many choices, from the pizzas to wood-roasted vegetables. Flatbreads, salads, sandwiches and some house specialties are always popping up. And the desserts — not to be missed — are known to keep people coming back for more. Crowded, yes — but it is a Central Phoenix atmosphere with a lively ambience that will energize any meeting.

111 E. Camelback Rd., Phoenix (602) 200-8111 stfrancisaz.com

Caffe Boa

8877 N. Scottsdale Road, Scottsdale (480) 922-5666 cask63.com

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Photos: Cask 63 American Eatery & Wine Bar (top), Caffe Boa (bottom)

A Fine American Eatery in Cask 63

Valet makes this otherwise very busy hot spot an easy place to slip into for that last-minute lunch meeting.

There’s patio dining among the bamboos or inside seating among the many wine bottles available for purchase. The food is simple yet very satisfying, from the cheese board to the NYC Grilled Cheese sandwich.

Enjoy paninis, salads, soups and a choice of four bruschettas from the more than ten options.

3939 E. Campbell Ave., Phoenix (602) 852-3939 • postinowinecafe.com

Celebrating more than 25 years of serving the women business owners of Phoenix

Spring 2012 • nawbophx.org

President’s Message About NAWBO

NAWBO® prides itself on being a global beacon for influence, ingenuity and action and is uniquely positioned to provide incisive commentary on issues of importance to women business owners.

NAWBO Phoenix propels women entrepreneurs into economic, social and political spheres of power.

Visit one of our FREE Welcome Meetings - For All New and Prospective Members.

They offer a casual, informational opportunity that both highlights the local and National benefits of NAWBO Membership. Plus, this is a great place to hear about the diversity in our benefits and determine if NAWBO is a fit for you and your business.

Please bring business cards too!

For more information, please visit NAWBOphx.org.

Phoenix Metropolitan Chapter of the National Association of Women Business Owners 7949 E. Acoma Dr. #207 Scottsdale, Arizona 85260 480-289-5768 info@NAWBOphx.org

This issue Page 2

• Invest in Your Business by Utilizing a Professional Business Coach • When You Need to Hire a Coach

Page 4

The Real Value of Advice

Page 7

Springtime in Arizona is finally here.

This is the time to take advantage of not only spring cleaning the house, but also your business. That’s right, double check your budget and make sure you’ve cut or added to support your year’s planning activities. Also make sure you’ve got a spring in your sales delivery too! Changing it up a little will be refreshing to not only your team, but also your prospective clients.

Here at NAWBO Phoenix we have also made some great changes this year, so please come check us out at one of our upcoming events. We have a new Association Management Team, SOS Association Management Solutions, as of January 2012. Our new administrative contact is Suzanne Lanctot and she can be reached at Suzanne@nawbophx.org or at 480-2895768. Their firm is bringing several new ideas to NAWBO Phoenix and we look forward to a long relationship with their team. Also we are currently in the process of building a new leadership team for the 2012-2013 year. This always is great for an Association as getting involved really helps keep members long term. Please reach out to myself or the President Elect Lynda Bishop if you are interested in joining any committees.

This is also the time of year that we are putting on a membership drive for the months of March and April. If you join during this drive you will receive $25 off of your annual membership.

We also are sponsoring prizes for the recruiters and also the new members that join during this time. If you want Suzanne Lanctot to learn more about NAWBO please feel free to attend one of our welcome meetings that are always at 10 am on the 2nd Wednesday of every month right before our monthly educational meetings. Looking forward to seeing you soon and thanks again for the opportunity! Now go out and enjoy our fabulous weather!

Kristine Kassel President, NAWBO Phoenix

Kindest Regards, Kristine Kassel NAWBO Phoenix Chapter President 2011-2012

How to Boost Your Business without Busting Your Budget and more...

nawbophx.org

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NAWBO NEWS

When You Need to Hire a Coach

By Lynda Bishop, MPC, CEC

Asking for help is often one of the hardest things a business owner does, and yet it is something that can make the difference Lynda Bishop between dreaming about the success of their business and actually having the success they dream of. A business coach is not a therapist or a consultant, they are a skilled, professional confidant completely focused on your success and can give you that extra enthusiasm and push you may need.

Many people go into business because they have an idea or a skill that they wish to dedicate their professional lives to. They

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NAWBO NEWS

know how to do something better than anyone else and want to share that with the world. They have a gift. The tough part is that having a gift does not mean that the gift holder has everything it takes to actually run a successful business. Business owners know how difficult it can be to wear all of the hats required and few people are good at all of the roles required. There are few great marketing expert-accountant-administrative-customer service-problem-solving-engineer-visionaries out there. Even if there were, how would they know which piece to put first and when? Just thinking about doing all that it takes to run a business without the right help can land you right into the land of overwhelm.

So, when is the right time to hire a coach?

Ideally, the right time to hire is at the onset of starting a business. There are coaches available who specialize in organizing new start-up businesses and helping them to build on a solid foundation built for success. Similar to getting pre-marital counseling, a business-startup coach can help you identify challenges before they happen and help you to make a clear plan with fewer surprises along the way.

What if you already are in business, when do you hire a coach? There is no easy answer that fits every business owner, but here are five signs that might indicate that hiring a good business coach might be your best move (any one of them is reason enough):

Invest in Your Business by Utilizing a Professional Business Coach

By Kristi Trimmer

The Social Media industry is changing the landscape of business at warp speed.

Keeping up with those changes and focusing Kristi Trimmer a business strategy on ever evolving social platforms can be difficult for the small business owner. When I started Orange Dragonfly Media, I knew the only way to grow it into a profitable marketing firm was to enlist the help of a Professional Business Coach. During the first year of having a business coach, I worked on my Business Plan, Strategic Partner Plan, and formed ways to creatively problem solve issues that come with opening a new business. I did all the homework the coach assigned and carefully laid down the groundwork for a successful budding firm.

My goal for 2012 is for my boutique marketing firm to really soar, and for that I would need to kick up my efforts up another notch. I invested time and money and met with my professional business coach, Lynda Bishop of Summit Alliance Solutions, for an intensive eight weeks.

Each week, I was held accountable to the tasks assigned. Everything from breaking through fears to solidifying subcontractor agreements, to clarifying product offerings, to a solid marketing plan, with a very specific action plan written on how to accomplish each task.

Creating a sales forecast and a corresponding budget were the hardest for me. With the coach’s help, we went over each piece every week until it was one dynamic tool that I use to direct my business daily. Being crystal clear on specific goals and having my coach hold me accountable, allowed me to start off 2012 with a clear plan of action and the drive to accomplish each goal.

First quarter of 2012 has been like a rocket launched out of my business. I am up almost 400% from 2011 for the same time period. My phone hasn’t stopped ringing and I had to bring on additional staff! The increased business revenue I’ve seen is directly related to the plan of action my business coach helped me lay out. We continue to meet twice a month to stay on track.

The benefits of working with a business coach far outweigh the time and financial costs associated with the investment. It is truly an investment in you and your business! I could not imagine running a small business without having a trusted advisor to guide me through the crazy ride of small business ownership, and am grateful I have a trusted ally to celebrate my wins with!

Kristi Trimmer Orange Dragonfly Media www.OrangeDragonfly.com Years as a NAWBO member: 1 Years in business: 2

• You are losing your enthusiasm for being in business (loss of passion) • You are not making enough money, or your business has stalled • You are working as many hours as you can, want to expand your business, but are not clear on exactly how to proceed • You are full of ideas but need help with taking action or following through • You have gone as far as you know how to go, but are not satisfied and want more (you can’t see your own blind spots, a coach can help you find them).

Wishing you success!

Lynda Bishop, MPC, CEC President, Summit Alliance Solutions, LLC www.summitalliancesolutions.com Years as a NAWBO member: 3 Years in business: 7

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NAWBO NEWS

The Real Value of Advice

By Julie A. Kern, CPA, CFP®

As a financial advisor, I have helped clients get out of debt, save for retirement, make better decisions about mortgages and car purchases, reduce their tax bills, and protect their assets and their Julie A. Kern loved ones from an unexpected disaster. But the area in which I have had the largest impact has been in saving my clients from themselves. That’s right.

More than the economy or tax rates or the stock market, your decisions about money play the biggest role in determining your level of financial success.

Think about the recent recession. When the stock market hit its low in March of 2009 and many people were moving their investments to cash, did you feel an urge to

do the same? Maybe you did change your investment strategy during that time. At the very least, you may have lost some sleep over it—worrying about what the impact would be on your future. Hopefully, you were working with a qualified financial advisor who “talked you off the ledge” and kept you from making changes at precisely the wrong time.

Everyone understands the wisdom of buying low and selling high, yet our emotions prod us to do exactly the opposite in times of market lows.

Business owners face additional challenges in maintaining discipline when it comes to executing their financial plan. First, they are entrepreneurs and by nature enjoy the freedom of making decisions and being in control. This works against them when it comes to financial planning, where changing courses mid-stream can wreak havoc on the results. Decisions like deciding to sell off part

The Women’s Enterprise Foundation WEF is a 501(c)3 charitable organization that supports and inspires emerging women business owners within the greater Phoenix area who have a demonstrated business development need or who would benefit from specialized educational training and development opportunities.

To learn more or to make a donation visit www.WEFPHX.org

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NAWBO NEWS

of your portfolio to invest in that great new company your buddy told you about on the golf course or rewarding yourself with that trip to Europe that you’ve always dreamed of—all the while justifying it as a one-time opportunity—will do more damage to your financial future than any recession ever could.

Secondly, business owners are busy people who enjoy their work but often don’t like doing paperwork or other boring tasks. Important details like bookkeeping, tax returns, cash flow analysis, and financial projections often fall by the wayside as seemingly more important projects take precedence. With that being the case, business owners have the most to gain by having a solid financial professional on their team, guiding them all along the way (and yes, saving them from themselves at times).

Our lives get busier every year and technology has created an environment where we are always connected to someone, talking about something, and multi-tasking with most of our waking hours. There simply isn’t time to do a good job with our own financial planning. We understand the value of hiring a professional to handle other duties in our busy lives like housecleaning, yard work, and tax preparation, so it only makes sense to have an expert guide us in our finances. If you aren’t currently working with a qualified financial advisor, let me save you from yourself and tell you to get one today!

Julie A. Kern, CPA, CFP® Bridge Financial Strategies www.bridgefinancialstrategies.com Years as a NAWBO member: 2 Years in business: 3 (10 in the industry)

Saved from Myself

By Doug Behm, Director of Technical Architecture at American Express

A critical component of reaching any goal in life is to have a plan. A good financial planner spends time with a client to understand their unique situation and goals then crafts a strategy to reach their goals.

Like a lot of people, I figured financial planning was just about managing your investments but it turns out to be a much more comprehensive engagement. My planner Julie Kern, of Bridge Financial Strategies, optimized my portfolio to minimize tax expenses, provided tax planning advice and guidance on my insurance coverage and estate planning needs.

In addition, Julie provides a layer of insulation by protecting me from reactive investment decisions during times of extreme market volatility. You hire a mechanic to fix your car and a roofer to fix a leaking roof, why wouldn’t you hire a trained professional to manage your largest asset?

NAWBO Board of Directors Executive Committee

Board of Directors

President Kristine Kassel Benefits by Design

Director of Communications Shawn Vallee Think Fresh Advertising

President-Elect (Bylaws Chair) Lynda Bishop Summit Alliance Solutions, LLC

Director of Corporate & Economic Development Amy Bruske Kolbe Corp

Secretary Marnee Weber The Caregiving Coach Finance Director Barbara Appenzeller Appenzeller & Associate, CPAs, P.C Immediate Past President (Past President Chair) Cindy Hynes Hynes Benefits Consulting, LLC Director of Administration NAWBO Office Suzanne Lanctot SOS-Association Management Solutions

Director of Marketing Services Nancy Sanders Three Dog Marketing Director of Membership Services Peggy Ridgley European Touch Interiors Director of Media Relations Lisa Bhella INBOX2OUTBOX, LLC Director of Programs Susan Ratliff Susan Ratliff Presents Inc. Director of Public Policy Ginger Lamb Arizona Capitol Times Ambassador Chair Cheryl Skummer Meridian Payment Systems Awards Chair Marnee Weber The Caregiving Coach

Community Alliances/Diversity Chair Shelly Winson True Choice Benefits LLC Community Service Chair (ex-officio) Ginny McMinn McMinnHR Honorary Advisory Council/ Past Presidents Council Chair (ex-officio) Robin Orchard Orchard Medical Consulting Mentor Program Chair Pamela Smith NUMBERS etc Neighborhood NAWBOs Chair Connie Zimmerlich ClickChick Photography NAWBO University Chair Dorothy Wolden Creative Intuition Membership Retention Chair Colleen O’Shaughnessy Met Life Social Media Chair Lisa Bhella INBOX2OUTBOX, LLC Women’s Enterprise Foundation (ex-officio) Jackie Wzsalek Despins Printing & Graphics

Ken Blanchard College of Business | College of Education | College of Nursing | College of Arts & Sciences | College of Fine Arts & Production

Campus • Evening • Online

A R I Z O N A’ S P R I VAT E U N I V E R S I T Y S I N C E 1 9 4 9 Get started today! 855.287.0174 | www.gcu.edu/inbusiness Grand Canyon University is regionally accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools. (800-621-7440; http://www.ncahlc.org/ ).

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NAWBO NEWS

Three Signs You Need Marketing Support

By Nancy Sanders

Women business owners can do it all: network and build solid relationships; generate revenue by demonstrating our value and expertise; and Nancy Sanders grow the business … to a point. As other advisors have shared in this issue, business owners need to recognize when to get help. In no other area is this as critical as in marketing and business development. But many times we don’t know when we need to ask for help. I’ve listed three signs to help determine when it’s time to meet with a marketing professional.

You are overwhelmed with work.

Few of us have enough staff or time to complete everything we want. Many marketing firms offer a variety of services from creating monthly newsletters to a fully integrated strategic marketing campaign. You can select how much

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time (and money) you want to invest, freeing you up to focus on your strengths.

You don’t know what you don’t know.

Perhaps you’ve made an investment in a marketing tool and have some systems established. But you have questions. “How do we track ROI from our efforts?” “Why are “open rates” dropping and prospects aren’t responding to our offers?” Maybe you just need a coach to come in and provide some training, answer specific questions and give you a fresh perspective. An investment of a few hundred dollars might enable you to generate tens of thousands of dollars in new revenue.

You want to generate more revenue.

Business owners frequently fall into the “go get the business, service the business and then get more business” treadmill. Wouldn’t it be great to have a steady flow of new business coming in? A marketing firm can show you a

way to market more effectively, consistently and professionally, enabling you to focus on what you do best—running your business.

Whether you are in the process of expanding your business or just want to be more effective, talk with a marketing consultant and watch that light bulb over your head begin to glow with new ways to embrace marketing and improve your revenue.

Nancy Sanders, Three Dog Marketing Years as a NAWBO member: 6 Years in business: 1+

Value of ASBA

By Kristine Kassel, NAWBO President and ASBA Past-Chair

How to Boost Your Business without Busting Your Budget

By Shawn Vallee

As a business owner with a background in creativity, I needed advice on creating business systems. What I was happy to discover was that there are many low and no cost solutions when looking for business advisors.

The Arizona Small Business Development Center (AZSBDC) provides no-fee consulting services (the Shawn Vallee organization is funded by the Small Business Administration), is a hub of connections and offers a wealth of business knowledge. You’ll be matched with an advisor who best fits your business needs. The advisors may also suggest business classes and workshops that will lay the foundation for many of your business systems.

NAWBO’s Mentoring Program is hosted by the AZSBDC and there is no charge to NAWBO members. The Women’s Enterprise Foundation works closely with NAWBO to provide emerging women business owners grants and scholarships to support participation in NAWBO along with other business needs.

SCORE matched me with a working entrepreneur; Chuck helped identify business prospects’ expectations of our company. Gaining objectivity showed us what we needed to focus on.

Fresh Start provides classes for start-ups and women business owners. I pursued Lynn after seeing her present at Fresh Start. I asked if she would consider taking me on as a mentee. We discussed expectations and she’s been a valued advisor ever since.

Lynn also dedicates some of her time at JumpStartBiz at Meridian Bank in Fountain Hills. They open their doors this February to entrepreneurs—with business space and free advice.

My advisors and mentors have each Shawn Vallee, uniquely helped me improve my business. The ValleeThinkFresh.com day will come that I will share what I’ve learned.

It will be my opportunity to give back what so many of my advisors have given me. That’s the true meaning of priceless.

nawbophx.org

Years as a NAWBO member: 1 Years in business: 6

Many of you probably are not aware that NAWBO Phoenix and ASBA have an Alliance Partner relationship.

NAWBO members receive a discount on the ASBA membership fee. This is a great relationship for us as ASBA offers several great programs that our members can now take advantage of. Some of those programs are very educational and also provide personal coaching.

They are currently offering a Business Development Series and you as a business owner can select the different classes that apply specifically to you. They also offer one-on-one business analysis which is completely free to their members. And of course you can’t forget the original Fast and Curious Speed Networking. Bring your 30 second commercial and be prepared to say it over and over as well as the opportunity to meet several business owners at the same time.

ASBA also offers several affinity programs that provide discounts to help small business owners cut costs. This is because they have the buying power of a larger organization because of their membership size.

Some of those programs include a special program with Staples for office supplies, credit card processing fees at super low rates, Human Resources and Payroll processing and of course many insurance programs such as Delta Dental, VSP, UNUM and CIGNA. The other area that ASBA is helping out small businesses today is with advocacy. They are helping business owners by keeping up on all the bills and legislative activities going on within our state and nationally. They have a full-time lobbyist and an active public policy committee.

It would be worth it to check out what ASBA is offering today by visiting their website at www.asba.com.

Kristine Kassel, NAWBO President and ASBA Past-Chair NAWBO member 10 years Owner of Benefits by Design for 15 years

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NAWBO PHOENIX Corporate Partners Presidential Corporate Partners Salt River Project State Farm Insurance Strategic Corporate Partner Alliance Bank National Bank of Arizona Executive Corporate Partners Benefits By Design Kolbe Corp Snell and Wilmer Southwest Gas The New Well Wal-Mart

WEF 5K Fun for Scholarships!

By Jackie Wszalek

Every journey starts with a single step!

Whether it’s a 5K run, a successful business or a scholarship application for a Nawbo membership, the journey is a little easier and a lot more fun with a little help from our friends.

Women’s Enterprise Foundation (WEF) raised some money and had a little fun with the Women in Business 5K Fun Run/Walk at Tempe Kiwanis Park on February 5. Men, women, children and dogs enjoyed a crisp morning stretching, walking, running and helping women succeed.

Along with a little help from our friends at Appenzeller & Associate CPAs, Bridge Financial Strategies, Benefits by Design, Chi Running/ Walking, Despins Printing and Graphics, Orchard Medical Consulting, Price Kong CPAs, The New Well Fitness and Wellness Centers,

Three Dog Marketing and Women in Banking, WEF succeeded in raising even more money for women entrepeneurs.

The monies raised will fund scholarships for a year’s membership in Nawbo, including luncheon fees and mentoring opportunities.

Women in business for at least one year are eligible. Applications and a business plan template are available at www.wefphx.org.

Applications are due February 28th, 2012.

Grants for educational opportunities will also be available later this year for Nawbo members looking to expand their businesses.

Follow us on Facebook for more information on events and opportunities. Contact Jackie Wszalek at 602-810-4005 jackie@ despinsprinting.com for more information.

Presidential Media Partners KFNX News-Talk Radio Media88 Strategic Media Partners Arizona Capitol Times Creative Intuition Networking Phoenix.com Executive Media Partner CITYSunTimes Despins Printing Easel Photography In Business Magazine Money Radio 1510 AM Business Corporate Partners APS Benjamin Franklin Plumbing Border States Electric Clean N Fresh Orchard Medical Consulting Paychex Price Kong The Car Source Wells Fargo

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NAWBO NEWS

Get social with NAWBO Phoenix It’s a great way to stay informed on everything NAWBO Phoenix and expand your online network. And don’t forget once you’re there to make a recommendation to let everyone else know how great it is to be a NAWBO Phoenix Member.

Index Index by Name Al-Dabbagh, Amr, His Excellency Mr. , 12 Anderes, Tom, 22 Babcock, Elaine, 22 Barrett, Craig R., 9 Behm, Doug, 45 Bishop, Lynda, 41, 43 Broome, Barry, 22 Bruhnke, Doug, 10 Burkhart, Patrick, 22 Churchard, Karen, 12 Drucker, Peter, 22 Duhigg, Charles, 29

Index by Company American Express Open, 18 American Express, 45 Appenzeller & Associate CPAs, 48 Arizona Board of Regents, 22 Arizona Centennial 2012 Foundation, 12 Arizona Chamber of Commerce & Industry, 32 Arizona Diamondbacks, 35 Arizona Energy Workforce Consortium, 22 Arizona Foundation for Medical Care, 7 Arizona Hispanic Chamber of Commerce, 32 Arizona Public Service, 22 Arizona Small Business Association, 31, 32, 33, 47 Arizona Small Business Development Center, 47 Arizona State University, 13, 22 Arizona Technology Council, 32 Association for Corporate Growth — Arizona, 32 Benefits By Design, 48 Benjamin Franklin Plumbing, 18 Biltmore Bank of Arizona, The, 51 Blacktie Arizona, 27 Board of Visitors, The, 30 Boeing Company, The, 22 Bridge Financial Strategies, 48 BrightStar Care, 18 Caffe Boa, 39 Cask 63, 39 Cassidy Turley BRE Commercial, 4 Center for Energy Workforce Development, 22 Center for Health Information and Research, 22 Center for Services Leadership, 13 Central Phoenix Women, 32 Chandler Chamber of Commerce, 32 Chandler-Gilbert Community College, 22 Chi Running/Walking, 48 City of Phoenix, 10 Conquest Training Systems, Inc., 4, 36 Despins Printing and Graphics, 48 DocuTech Corporation, 12 Economic Club of Phoenix, 31, 32 Elements Therapeutic Massage, 18 Estrella Mountain Community College, 22 Expect More Arizona, 37 Fitness Together Holdings, Inc., 18

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Eberenz, Jack, 18 Feirstein, Brian, 39 Gerretzen, Fred, 20 Grady, Robert, 12 Gudeman, Betty, 22 Heasley, Kathy, 34 Jenkins, Ty, 12 Jennings, Sherman, 22 Jervik, Jeff, 18 Kassell, Kristine, 41, 47 Kern, Julie A., 44 Kruger, Elizabeth Rush, Ed.D., 50 Lanctot, Suzanne, 41

Leonesio, John, 20 LeRoy, Greg, 16 Levine, Susan, 30 Martin, Jeffrey A., 10 Moorhead, Jim, 29 Murray, Tom, 14 Naylor, Ryan, 12 Panas, Jerold, 28 Pareto Vilfredo, 50 Pearson, Bryan, 29 Sanders, Nancy, 46 Sheely, Mary Ann, 30 Sobel, Andrew, 28

Stanfield, Linda, 18 Stanton, Greg, Mayor, 10 Sun, Shelly, 18 Sundberg, Lori, 22 Tate, Ryan, 29 Tingle, Jerry, 39 Toney, Mike, 36 Trimmer, Kristi, 43 Vallee, Shawn, 47 Wszalek, Jackie, 48 Yaffe, Paul, 12

Franchise Integration, 18 Fresh Start, 47 Getting AHEAD, 22 Good Jobs First, 16 Governor’s Council on Workforce Policy, 22 Grand Canyon University, 45 Greater Phoenix Chamber of Commerce, 32 Greater Phoenix Economic Council, 22 Growth Nation, 10 Heart & Mind Network, 27 Heasley & Partners, Inc., 34 Holmes Murphy, 8 Hospice of the Valley, 30 Intel Corporation, 9 International Franchise Association, 18 Jerold Panas, Linzy & Partners, 28 Joint, The, 20 JumpStartBiz, 47 Linda Land, 8 LocalWork.com, 12 Maricopa Community Colleges, 22 Maricopa County Human Services Dept., 22 Maricopa Workforce Connections, 11, 22 Massage Envy, 20 Mayo Clinic, 52 Meridian Bank, 47 Microsoft Store, 33 National Association of Women Business Owners, 32, 41, 46 National Bank of Arizona, 2 National Manufacturing Institute, 22 New Well Fitness and Wellness Centers, The, 48 ’Women in Banking, 48 Orange Dragonfly Media, 43 Orchard Medical Consulting, 48 Palo Verde Nuclear Generating Station, 22 Peoria Chamber of Commerce, 32 Phoenix Convention Center, 40 Postino Arcadia, 39 Precision Door Service, 18 Price Kong CPAs, 48 Q, the Sports Club, 20 Realty Executives International, 18 Reliable Background Screening, 15 Salt River Project, 3 Scandinavian Health Spas, 20

SCORE, 47 Scottsdale Area Chamber of Commerce, 32 Scottsdale Healthcare, 21 Small Business Administration, 47 SOS Association Management Solutions, 41 Southwest Gas Corporation, 22 St. Francis, 39 Stoney-Wilson Business Consulting, LLC, 15 Strategic Power, 50 Summit Alliance Solutions, LLC, 43 Surprise Regional Chamber of Commerce, 33

Tempe Chamber of Commerce, 33 Three Dog Marketing, 46, 48 Thunderbird School of Global Management, 12 Villa La Paws, 14 W. P. Carey School of Business, 13 Wells Fargo Bank, 17 West Valley Women, 33 Women of Scottsdale, 33 Women Presidents Organization, 18 Women’s Enterprise Foundation, 44, 47, 48 Yulex Corporation, 10 Bold listings are advertisers supporting this issue of In Business Magazine.

Download Us Now www.inbusinessmag.com

/inbusinessmagphx @inbusinessmag

It's a Hub to Building Business

M a r c h 2012

49

Roundtable

A Candid Forum

Are You Working Harder for Less Profit?

You can profit from the 80/20 Rule

by Elizabeth Rush Kruger, Ed.D. No customer wants to hear that you have other customers, but you do. What’s more, no customer wants to hear that you have more important customers, but that’s also true.

If your business treats all its customers exactly the same way, you wind up sacrificing a lot of profit in the process.

Virtually every business seeks to increase its profit, but few business leaders realize that a universal law governs profit from customers.

The law in play here is called Pareto’s Principle and it’s named for a well-respected Italian economist. Vilfredo Pareto observed in 1896 that 20 percent of the people consistently own 80 percent of the wealth. He also noticed that 20 percent of the pea pods in his garden contained 80 percent of the peas. Fast forward a century and recent scientific research confirms that Pareto was right — Pareto’s Principle does accurately predict results in all types of cases.

Many businesses have used the 80/20 Rule to improve quality, productivity, time management and sales, but this law also applies to profits. According to the 80/20 Rule, you can expect the most profitable 20 percent of your customers to generate 80 percent of your profits. Meanwhile, the bottom 20 percent of your customers will generate only 20 percent of your profit. On average, customers in the top 20 percent generate 16 times more profit than customers in the bottom 80 percent of your business.

The 80/20 Rule can increase the profits of any business by distinguishing top customers, delighting them with a top market strategy, and discouraging less profitable customers.

For example, if you are a distributor, you can quickly enact these three steps: Distinguish — Distinguish the most profitable 20 percent of your customers from your other customers. Allocate one day a week to serving them with a top market strategy. Expect these customers to generate 80 percent of your usual weekly profits in one-fifth of the time.

Delight — Identify prospects just like them and target them on the other four days of the work week. Use your top market strategy to convert these top prospects into new

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customers. Reward these loyal, heavy users with loyalty programs. Predict that these new customers will be highly profitable.

Discourage — Allocate neither time nor other resources to serving customers in the bottom 80 percent. Realize that they cause more problems than they’re worth. Encourage less profitable customers to patronize a competitor by implementing stratified policies, and replace them with more profitable customers. Expect your profits from customers to quadruple when all of your customers are highly profitable.

For example, an insurance company I worked with personally services the top 20 percent of its customers but automates services to its other customers. As a result, its representatives have the time to prospect for highly profitable new customers. This top market strategy is a classic win-win game plan: Its profits have magnified and its top customers are delighted with the company.

Your win-win game plan is to customize a top market strategy for your highly profitable customers. Provide them exactly what they desire for an expected price and at a convenient location. Target them and similar prospects with your promotional campaign and appeal to their motivations for buying from your business.

Schools have taught you to treat your customers equally, but your customers do not treat your business equally. Your top customers highly value your business, so value their business. According to the 80/20 Rule, as noted above, your top customers will generate 16 times more profits than your less profitable customers.

This means that when your business implements a top market strategy, you can expect its profits from customers to quadruple.

Strategic Power segmentmarket.com

Elizabeth Rush Kruger, Ed.D., head of marketing consultancy Strategic Power, writes, speaks and consults about the 80/20 rule. Her book, Top Market Strategy: Applying the 80/20 Rule, released by Business Expert Press, uses a case example to demonstrate how use the 80/20 Rule to increase profit from customers.

CORRECTION: Our Roundtable article in the Jan. 2012 issue stated that e-Verify was an optional program employers could use to check the immigration status of potential employees. However, Arizona law (A.R.S. §23-214) requires all Arizona employers to use e-Verify to confirm employment eligibility of employees.

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®

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

Because of Mayo Clinic’s collaborative model of care, Raley was able to have diagnostic tests, surgery and rehabilitation in one place with a team that was focused on her recovery. Now, Raley is cancer-free and back in training. For years, people from all walks of life have come to Mayo for answers. Mayo is an in-network provider for millions of people. To schedule an appointment, visit mayoclinic.org/arizona or call 1-800-446-2279.