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November 1, 2016

Inside this issue: Health & Wellness in SW Oregon Mayors and Business Policy Demand-Driven Innovation


A few words from Greg

There’s a strong effort in every community I visit to encourage entrepreneurialism (that is harder to say than it is to spell). The “spirit”, as it’s called, to start your own business has taken a down-turn in the past few years all over the country. Researchers in many areas believe that’s also a strong reason for the slow resurgence of employment. Small businesses are historically responsible for hiring following a recession. Without small business the unemployment rate stays up longer. The tail on the Great Recessions curve is much longer than could have been predicted, even by people not seeking a political office. Support and every kind of encouragement is needed for those who would start a new business but are hesitant to do so. Local level activity is the place to begin. Consider the Mayor’s office and the city council. With a dynamic and supportive City Hall the likelihood of new business growth will improve. There is also encouraging news from Salem that more consideration is being made to make starting and owning a business easier. That effort is being pushed in two directions; one from the local communities to the State level and the other from legislative offices to the local level. If these two collide nothing but good should result. Small Business Development Centers and local colleges are spread throughout SW Oregon. All of them are extremely helpful in answering, and sometimes solving, small business challenges. Whether you are a new business or one that is well established I encourage you to contact either of these organizations. You will probably be pleasantly surprised at what they have to offer. My experience thus far has been that places like Coos Bay, Medford, Ashland, Klamath Falls, Roseburg, North Bend and Grants Pass are more than anxious to assist with a wide range of requests. Other towns probably are too, I just haven’t had the conversations yet. We live in one of the most amazing places on the planet. All of us should be carrying our banner beyond our borders. Be courageous,

Greg Henderson Greg Henderson, Publisher greg@southernoregonbusiness.com

Southern Oregon Business Journal

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A JOURNAL FOR THE ECONOMICALLY CURIOUS, PROFESSIONALLY INSPIRED AND ACUTELY MOTIVATED

703 Divot Loop

ASSISTING THE ECONOMIES OF THE SIX COUNTIES OF SOUTHWEST OREGON

Sutherlin, Oregon 97479 www.southernoregonbusiness.com 541-315-6127

Table of Contents PUBLISHERS NOTE

AGRICULTURE

FINAL NOTES

2 A Few Words From Greg

12 Cranberry Harvest

28 “Wait Until Next Year”

13 Coos & Curry Co ECONOMICS

14 Everest Family Farms

4 Oregon Economic Indicators 5 Curry County Economy

BUSINESS

15 Mayors and Policy HEALTH & WELLNESS

16 New I-9 Form

7 Curry Health Care

18 Start-Up Programs

8 Concussions Rise

19 Next Steps After Failure

Broccoli & Fries 9 Benefits Strategy 11 Employee and Employer Responsibilities

21 Demand - Driven Innovation 23 Rogue Valley Business on the Upswing 25 Theory of Constraints 27 Launch Ashland

Cover Photo: VA Medical Center Roseburg, Oregon Southern Oregon Business Journal

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State of Oregon Economic Indicators

How can I interpret the Oregon Measure of Economic Activity?

Review

Incoming data continue to indicate that Oregon is in the midst of a more mature stage of the business cycle as the pace of growth levels off after the acceleration out of the recession. The Oregon measure of economic activity rose to 0.84 from a What is the significance of the movingaverage measures? downwardly adjusted revised July figure of 0.61. The three-month moving average, The monthly measures can be very volatile. To reduce the noise, it is helpful to focus on which smooths month-to-month volatility in the measure, held constant at 0.66, the average of the most recent data. where “zero” indicates average growth Is this approach used elsewhere? over the 1990–present period. The manufacturing sector again made a nearly Yes, the Chicago Federal Reserve Bank uses neutral contribution to the measure; the same basic approach to measure both national and regional economic activity. national manufacturing surveys were a weight on the sector. Positive contributions What is the difference between the two from employment and housing permits measures? bolstered the construction component. The Oregon Measure of Economic Activity Both the household and services sectors uses a methodology that allows for the were supportive of the measure in August, incorporation of a larger number of variables. largely reflecting strong numbers across a The University of Oregon Index of Economic broad array of labor market indicators. Indicators focuses on a narrower set of A reading of “zero” corresponds to the average growth rate for that particular region. In other words, the measures identify periods of fast or slow growth relative to trend.

variables using a different methodology used by the Conference Board to compute leading indicators for the United States. Using different indicators allows for a more complete picture of the Oregon economy.

The University of Oregon Index of Economic Indicators slipped 0.3 percent in August while the July number was revised

oregon

economic forum Southern Oregon Business Journal

TM

modestly upward. Similar to the previous month, most indicators were generally unchanged to modestly softer. Employment services payrolls (largely temporary help employees) fell, breaking through the lower end of its recent range. This indicator bears watching, as it may indicate a broader slowdown in activity in the months ahead. It may also, however, reflect a weak manufacturing environment. See also the persistent weakness in the core manufacturing new orders. To date, manufacturing weakness has remained contained and not spread more broadly throughout the economy. Moreover, the sector is expected to improve as the negative impact of lower oil prices and a stronger dollar wane. Together, these indicators suggest ongoing growth in Oregon at an above average pace of activity. The UO Index typically moves sideways as a business cycle matures. Consequently, occasional declines are to be expected.

Tim A. Duy Director, Oregon Economic Forum Department of Economics University of Oregon duy@uoregon.edu

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Curry County’s Economy The Last 10 Years 2006 – 2016 By: Annette Shelton–Tiderman Regional Economist—Southwestern Oregon

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s Oregon’s economy sails toward ever-brighter shores, coastal Curry County continues to navigate the choppy waters of economic recovery. The plunging unemployment rates of the Great Recession and workers’ struggles to find employment have been edged aside by revitalized business activities and new ventures. The Great Recession came early and stayed late. When looking at national employment levels, the Great Recession officially started December 2007 and ended (stopped shedding jobs) by June 2009. Curry County’s employment peaked in 2005; hit bottom in 2011 after which the county’s industries started adding jobs, only to drop back in 2014. Not all industries were affected to the same degree; not all jobs lost have been recovered; and those that have returned often require additional or new skills. The economic landscape of the past 10 years has been rugged and varied. Curry County’s economy is grounded in the availability, use, and enjoyment of its vast natural resources. Industries associated with logging, wood products manufacturing, agriculture, fishing, and recreation are not only subject to unpredictable and sometimes extreme weather conditions, but are economic arenas subject to varying land- and oceanuse constraints. Against this backdrop of uncertainty and challenge, businesses have turned to streamlining activities and engaging in more efficient processes, e.g., using temporary workers hired through staffing agencies.

As with the nation and the state, the county’s construction industry was part of the leading edge of the downward plunge followed by nearly every other business sector. Only professional and business services, which includes staffing agencies, and private educational and health services managed to weather the Great Recession without losing jobs (2.4% and 0% job growth, respectively). Curry County’s construction industry lost 52.2 percent of its employment between May 2006 and May 2011. Mining and logging lost 21.4 percent of its employment, and manufacturing lost 20.0 percent of its jobs (mainstay wood product manufacturing employment dropped 20.8 percent). Southern Oregon Business Journal

Statewide, construction employment dropped 32.3 percent during this same period, and wood product manufacturing lost just over 41 percent of its employment. Other arenas, particularly those depending on discretionary spending such as retail trade and leisure and hospitality, lost jobs. Locally, retail trade shed 7.7 percent of its employment between 2006 and 2011; leisure and hospitality lost 15.7 percent of its jobs. Statewide, retail trade lost 6.5 percent of its employment, and leisure and hospitality did not lose jobs – it gained 0.2 percent during the years of downturn. Recovery is relative, depending on industry and location. Since the Great Recession bottomed out and businesses started adding jobs (2011-2016), Oregon’s construction industry has seen a recovery rate of 31.6 percent. The professional and business services industry has added jobs at a rate of nearly 25 percent; leisure and hospitality has gained jobs at the rate of 21.4 percent. This robust pace of recovery has been more subdued in rural Curry County. During the past five years, Curry County’s leading job-adding industries include leisure and hospitality (19.6%); private educational and health services (12.9%, primarily health services); manufacturing (11.5%; wood products manufacturing, 5.3%); construction (9.4%); followed by mining and logging (9.1%). In spite of these impressive growth rates, area construction employment is still 47.8 percent below pre-recession levels; professional and business services is 19.5 percent below; and manufacturing is nearly 11 percent below. Overall, only private educational and health services, and leisure and hospitality show levels above pre-recession levels (12.9% and 0.9%, respectively).

Industry projections for 2014-2024 take the past into account and attempt to move the status quo into the future. As such, Curry County’s past, its economic landscape, and the anticipated 5 percent employment growth rate are noticeably different from Oregon’s statewide projected 14 percent growth rate.

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Southern Oregon Business Journal

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Curry Health Care By: Greg Henderson Southern Oregon Business Journal In 1951 the Korean War was in its second year. Polio was still feared by every household and measles had yet to be controlled. Only the upper class households could afford a television and TV dinners had not yet been invented. Twelve different people have been president of the United States since then.

1951 was the year Curry General Hospital was built.

65 years leaves a mark on a hospital. It isn’t safe anymore. Fire code requirements have to be waived for a period until a new hospital can be built. There is no room for storing important equipment except in hallways and patients certainly lack complete privacy because of the crowding of activities that go on in a hospital.

Money cannot be wasted on unessential things so Ginny Razo knows she will be responsible for keeping her finger on the pulse of activities while ensuring operations are accomplished within the confines of budgets. She told me she was passionate about healthcare, and from the conversation we had, I believe her. Her passion includes the understanding she places on everyone she leads, that it is necessary for everyone to perform well. Ginny is leading by example. She wakes up at 3 o’clock in the morning excited about what she is doing with ideas to make or do something better. The public will see a shiny new building with state-of-the-art equipment and trained, experienced staff to operate everything. But there’s more to it than that. How will new and qualified staff be hired? How does a hospital in rural Curry County get physicians and surgeons to relocate? By involving the current staff and hospital volunteers and board members according to Ginny Razo. If you want high performing physicians to come to Curry County you must have high performing physicians involved in the recruiting process. So that’s what CEO Razo has done. Good people like to work with good people and Ginny knows that. This is an exciting ground floor opportunity for the caliber of people who will be providing health care for Curry County residents. They will be involved in fixing any shortcomings in systems, policies, and procedures. That kind of involvement creates an ownership and loyalty to the entire organization.

The people of Curry County passed a bond measure for $10 million to help fund the construction of a new facility. The final $22 million in costs will be paid by the USDA. When groundbreaking of the Curry Health Care facility takes place on April 12, 2017 the entire county can take pride and comfort in knowing they have an asset that will provide stateof-the art healthcare that has long been difficult for Curry General Hospital that simply outlived its useful life. Ginny Razo, CEO of Curry Health Care said she has been impressed with the attitudes and dedication of employees of Curry Health. Their ability to meet the challenges they have faced in providing excellent care to their patients along with the fact that they are “very, very good people” speaks well of them and should make the community very confident in the future. Curry General Hospital is an 18,000 square foot facility. The new Curry Health Care building will be 60,000 square feet, large enough to allow much needed additional health services to be provided. Physical Therapy and orthopedics will be added. An Oncologist will be joining the staff to treat those with cancer who previously had to travel many miles for their treatments. A pre-natal unit is going to be a part of the new hospital as well as a doubling of the delivery room unit. Southern Oregon Business Journal

The move to the new hospital is set on the “hard opening date” of April 12th. But, it won’t happen if everyone and everything isn’t fully ready. Ginny Razo described the next few months as an expectation of full involvement with a rapid sequence of events to meet the April 12th deadline.

Ginny Razo, CEO Curry Health Network Doctor of Science (DSc) in Healthcare Administration from the University of Alabama at Birmingham in Ala., and Doctor of Pharmacy degree from University of the Pacific in Stockton, CA

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Broccoli v. French Fries: Appealing to teens' impulse to rebel can curb unhealthy eating Steep Rise in Concussion Diagnoses in the U.S. Executive Summary Expansive news media coverage of football-related concussions and state legislation aimed at preventing participants of youth sports from “shaking off” signs of head injuries have coincided with a spike in the number of concussion diagnoses, according to Blue Cross and Blue Shield (BCBS) companies’ medical claims data. Concussion diagnoses increased 43 percent from 2010 through 2015 in the U.S. Additionally, concussion diagnoses spiked 71 percent for patients ages 10 through 19 during the same time span. For this age group, the fall is peak concussion season, during which time a dramatic spike in diagnoses occurs for males. Concussion diagnoses for young males in the fall are nearly double that of young females. Even though concussion diagnoses for adults ages 20 through 64 increased 26 percent over the same time period, there was little seasonal change compared to their younger counterparts. The percentage of concussion patients across all ages diagnosed with postconcussion syndrome nearly doubled between 2010 and 2015. Throughout the study, post - concussion syndrome was diagnosed equally for both males and females ages 10 through 19 who suffered concussions. Females ages 20 through 64 who suffered concussions, however, were nearly 60 percent more likely to receive such a diagnosis than males. Finally, BCBS data in 2015 show that patients ages 10 through 19 in some states have nearly a three times higher rate of concussions diagnosed than in other states. The intent of this report is to document concussion diagnosis rates and increase awareness that could help inform policy and concussion treatment practices for school districts and medical professionals.

Southern Oregon Business Journal

VS It's no secret that the adolescent years can be challenging: young teens have a heightened sensitivity to perceived injustice and react against authority. And their newfound social conscience and desire for autonomy can motivate many of their decisions - even food choices. A new study, "Harnessing Adolescent Values to Motivate Healthier Eating," by Christopher J. Bryan of the University of Chicago Booth School of Business, and David Yeager of the University of Texas, finds that by appealing to widely-held adolescent values, it's possible to reduce unhealthy eating habits and motivate better food choices among adolescents. The paper was published in the Proceedings of the National Academy of Sciences. "Our goal here was to portray healthy eating as a way to take a stand against injustice - to stand up for vulnerable people who lack the ability to protect themselves." To capture the motivating power of these values, researchers worked with groups of eighth graders to reshape their perception of healthy eating as an act of independence that serves the purpose of social justice. "We took a two-pronged approach to this," Bryan says. "First, our healthy eating message was framed as an expose of manipulative food industry marketing practices that influence and deceive adolescents and others into eating larger quantities of unhealthy foods." The researchers also described journalistic accounts of such industry practices as engineering processed foods to maximize addictiveness and to encourage overconsumption, as well as using deceptive labeling to make unhealthy products appear healthy.

Harnessing adolescent values to motivate healthier eating Proceedings of the National Academy of Sciences Christopher J. Bryan of the University of Chicago Booth School of Business www.medicalnewstoday.com/releases/312894.php

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A Benefits Strategy That Matches Your Business Needs As we enter annual enrollment season, many businesses have to make difficult decisions when deciding what benefits to offer to their employees, balancing value, affordability, and corporate culture. In an effort to support Oregon business leaders in selecting its annual benefit offerings, Oregon’s largest insurer, Regence BlueCross BlueShield, surveyed executives across 20+ organizations to develop five “innovative employer” archetypes. These archetypes can help organizations more easily identify the ideal mix of benefits for their unique needs. The Changing Healthcare Landscape Employers are now facing more complicated decisions around offering health care benefits than ever before. The Affordable Care Act (ACA) has driven much of this complexity as it mandates that employers offer specific types of benefits, plan designs and even affordability levels. With unemployment levels trending downwards, the need to attract and retain top talent is becoming increasingly competitive. Given this climate, it’s important for employers to align benefits packages with its belief system, corporate culture and business life cycle. Finding the Right Mix of Value and Affordability for Every Workforce Nine out of 10 employers feel they must offer medical insurance to attract quality workers, according to a 2014 LIMRA study. Yet, with all of the complex factors influencing health care benefits choices, the burden of selecting appropriate coverage is not a one-size-fits-all approach—even if one were to segment employers by size, industry, population or other factors. Today’s workplace often comprises a highly diverse mix of young and old, professional and blue-collar, and healthy and at-risk employees. The same holds true for the diversity of benefits preferences. For example, millennials will make up half of the workforce by 2020. This generation is generally healthy, prefer convenient consumer experiences, and are more transient. On the other end of the spectrum, many baby boomers are less satisfied with benefits, may have more chronic conditions – but also have a strong focus on improving their health.

Ensuring you have a benefits strategy that accounts for not only baby boomers but also millennials will help attract and retain talent that positions your company Southern Oregon Business Journal

for the long-term. The result: strategic employer archetypes that show case a continuum of benefits needs Based on employer insights, and taking into account current market dynamics, Regence developed five strategic archetypes to support employers in their benefit decisions.

Family Business: a culture of caring Family businesses believe in providing a safety net for their employees. Their primary HR and cultural needs often focus on transitioning business leadership to future generations and providing affordable health care to their workers. Their levels of technology and adoption and rates of change are in the medium range. The importance of benefits packages is also in the medium to high range.

Benefits offerings for the Family Business  Select a health care benefits platform that offers a high level of flexibility, perhaps offering between two and four plan options with different levels of deductibles and out-of-pocket costs.  Offer a Health Savings Account (HSA) option paired with a higher deductible health plan. This is most appropriate if employees are savvy enough to make informed health care decisions.  Identify a health insurance partner, such as Regence, that offers simple administration and enrollment.

Employee-Centered Business: Driving innovation across the organization Employee-Centered Businesses believe in developing jobs around employee strengths. They are willing to provide training and life skills to entry-level employees and offer engaging projects to challenge and inspire seasoned employees. As one would expect, the importance of benefits packages is high among this segment, as is the incidence of technology adoption, driven by high rates of change. 9


Benefits offerings for the Employee-Centered Business Select a traditional health plan option with fairly rich benefits.  Include a PPO plan offering low out-of-pocket costs for the most commonly used health care services. 

Benefits offerings for the High-Touch Professional Firm  Focus on innovative benefits packages that include health savings accounts and compatible highdeductible health plans. (This is because a highly educated workforce is more likely to both value the flexibility of these plans and understands how to best utilize them as informed health care consumers.)

Rising Star: Continuing rapid growth requires top talent The Rising Star archetype includes businesses that are at the forefront of innovation and undergoing rapid rates of growth. Technology adoption is extremely high and many are maintaining an aggressive product development roadmap. Leadership in these organizations understands that they must keep an eye on the competition and attract the very best employees to maintain their leading market position. As such, employee benefits packages are of the utmost importance for these employers. Benefits offerings for the Rising Star  Offer plans with low deductibles and value-added extras.  Consider implementing population health and wellness programs that provide outreach and support for nutrition, stress management and health promotion activities.  Hold on-site biometric screenings and health coaching might also help address the sedentary nature of job requirements in a highly professional workforce.  Add a telehealth component, which allows employees to virtually consult with physicians at home or in the office.

High-Touch Professional Firm: maintaining a high-performing culture Businesses within the High-Touch Professional Firm archetype have a distinct need to incent and reward high -performing workers, while grooming new employees to fit within this distinct culture. These skilled workers leverage insight and intelligence to help organizations like these adapt to a changing business climate. To attract and retain such high-quality workers, organizations must balance salary with benefits to meet diverse needs and make a strong effort to maintain a culture of innovation across their enterprises. While the rates of change are moderate within these companies as they are well established, their technology adoption and the importance placed on competitive benefit packages are both high. Southern Oregon Business Journal

Customer Experience Guru: high-quality service meets operational efficiency Employers that fit the Customer Experience Guru archetype place a high value on offering a stellar customer experience within every aspect of their operations. Many are focused on instilling a strong work ethic in their workforce—which primarily consists of younger employees. The rates of change are extremely high, as these organizations may still be in the expansion phase of their lifecycles. Technology adoption is also mid-range to high. Career development opportunities and training are highly prized by workers in these firms. However, given that lower-wage, younger workers may not value benefits packages as highly, these perks are often perceived as less important. Benefits offerings for the Customer Experience Guru  Consider offering employees access to health care benefits through a private exchange, which increases health plan variety and allows employers to set a fixed contribution amount. Setting the stage for more informed decision-making around health care benefits The archetype models described here can be used as a strong starting point for employers looking to collaborate with health insurance carriers to develop optimal benefits packages. If you’re interested in having a more in-depth benefits conversation, please consider giving Regence a call at 1-800-828-0030.

About Regence Headquartered in Portland, Regence has been serving Oregonians since 1941 and now provides more than 750,000 members with comprehensive health insurance solutions. For more information, please visit www.regence.com.

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Employee and Employer Responsibilities for Health and Safety In a typical workplace, unbiased health and safety management also covers the employers, just as it covers the employees. Employers are required to provide safe workplace to its constituents while employees are expected to adhere to the rules and regulations brought about and introduced during work orientation. This is usually discussed by a Compensation and Benefits Specialist or anybody from the Human Resource Group. There’s supposed to be a designated health and safety manager assigned to handle relevant issues concerning the workplace conditions as explained in workplace safety certification. These guidelines and standard information are available for perusal anytime through the conformance of Occupational Safety & Health Administration. On top of these, employers are also expected to perform the following: 

Keep the employees informed of the hazards likely to occur in the workplace during health and safety jobs training, precautionary labels, emergency alarms, color codes, chemical information sheets, and similar stuff. Bookkeeping and safeguard of medical records related to injuries and illnesses in case an incident affecting an employee happens in the work area where medical history of the patient will immediately become a need. Run battery of tests in the workplace ensuring everything in the workplace is safe for workers as mandated by the OSHA standards and other health authorities in case there may arise issues about the work area environment being a risk to the workforce. Perform exams and other medical screening procedures to ensure maximum health of all employees which can be detrimental if there are illnesses left unchecked and can likely harm the majority. Update bulletins of citations, injuries and illness records, and a poster of OSHA in the company’s visible walls where the majority, if not all of the employees will have the capability to read and review. Immediately inform OSHA in the first 8 hours in case a workplace accident happens, when there is death, or when there are three or more employees sent to hospitals for emergency as decided by the company resident doctor or nurse. Avoid retaliation or discrimination of employees in case they attempt or they actually use their right against the company which is likely within or under the discretion of the health and safety manager.

The above closures the discussion as to what exactly are the employer’s responsibility in keeping and maintaining occupational health and safety jobs while employees are Southern Oregon Business Journal

within the work areas. On the other hand, employees have equally similar responsibilities in adhering to workplace healthy and safety guidance, as well as in performing the expected activities to follow in cases of emergency, dangerous occasions, and hazardous times. Below are the OSHAapproved responsibilities for employees: 

As a worker, you should report work-related cases resulting in injury and illnesses in case your employer fails or declines to do so. The process has it that workers can inform OSHA anytime in case something hazardous happened in the workplace. In case of punishment or discrimination from the employer, it is the employee’s responsibility to immediately inform OSHA so necessary sanction will be imposed of after the issue is accordingly dealt with. It is an employee’s responsibility to assess working conditions as to whether the workplace is unsafe and unhealthy or otherwise, so necessary actions can be performed by OSHA in order to protect the safety and the common good of the majority. The employee has the responsibility of confirming whether the company he or she is engaged with have ever been inspected by OSHA, and if it isn’t, he or she can ask how likely can it be done in order to promote workplace health and safety. An employee has the responsibility to know Standard Industrial Classification (SIC) Code of the company so as to eventually learn and understand the most common industry hazard cited so far.

Both the employer and the employees are supposed to understand every aspect of their workplace rights and its corresponding responsibilities in order to avoid possible workplace bullying or discrimination. At the same time, knowing these things will inhibit both parties to take advantage of unlikable incidents or ignore events that requires immediate attention. At the end of the day, OSHA is just after the health and safety of everyone making a worker-friendly environment possible not only for the company owners, but also for the workforce.

https://ishm.org/employee-employer-responsibilitieshealth-safety ISHM 4841 E County 14 ¼ Street Yuma, AZ 85365 (877) 201-4053 US only (928) 344-5221 info@ishm.org 11


Cranberry Sauce Ingredients

1 cup white sugar 1 cup orange juice 1 (12 ounce) package fresh cranberries Directions In a medium saucepan over medium heat, dissolve the sugar in the orange juice. Stir in the cranberries, and cook until they start to pop (about 10 minutes). Remove from heat, and transfer to a bowl. Cranberry sauce will thicken as it cools.

Southern Oregon Business Journal

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The Cranberry Capital of Oregon It may surprise some to learn that Bandon, with its mild climate and crashing surf, is an ideal place for growing cranberries, and it has grown to a center of production since the berries were first commercially grown here in the In fact, today these cranberries make up approximately 95% of Oregon’s and 5% of the nation’s crop. About 1600 acres around Bandon, many family-owned, produce around 30 million pounds of berries. Cranberries, along with blueberries and Concord blue grapes, are one of the most commercially important fruits coming from North America. Bandon’s coastal climate combined with its sandy soil offer uniquely perfect growing conditions for cranberries. These conditions have helped Bandon’s cranberries earn worldwide renown. Native to North America, Cranberry plants are actually vines, and they are grown in large rectangular beds known as bogs. Despite common misconceptions, the bogs are not flooded year round. In fact, most of the time they are completely devoid of water, except for the water used for irrigating them like any other crop. However, cranberries do need water year-round. The wet weather keeps the bogs irrigated throughout the rainy months, and it ensures that there will be enough water for harvest time when the bogs are flooded. The mild autumns on the Southern Oregon Coast mean that Bandon cranberry farmers have a longer growing season than farmers in the mid-west and on the east coast. These growers are forced to harvest their berries in late September before the first frost, while harvest time in Bandon happens between mid-October and early December. This extended season produces a hardy berry and allows the berries to achieve the dark red color Americans have come to rely on for their Thanksgiving and Christmas meals, compared to paler berries from the east. Some of Bandon’s berries are sent to the east coast to mix with the berries there to improve their color. These riper berries also have a naturally higher sugar content, so cranberry juice with berries from Bandon require less added sugar. At harvest time, the bogs are flooded, and a special piece of equipment called a reel is used to loosen the cranberries from the vines. As the ripe berries can float, the berries then rise to the surface where they can be skimmed off and loaded into trucks. Most of Bandon’s cranberries are made into juice concentrate or frozen, while others are sold fresh, some dried, and some made into wine and sold at shops in the local area. Most of Bandon’s cranberries are sold to a major corporation, but a few local farms remain independent, and some grow organically. Growing and harvesting these berries are sometimes done differently, and they tend to sell to smaller companies or individual people at stands and farmers’ markets. Article Source: The Bandon Guide Southern Oregon Business Journal

Cranberry Production in Coos and Curry County Cranberries are an important source of farm income in the two county area. Beds along the South Coast produce 99% of Oregon's cranberry crop. Sandy, elevated, marine terraces provide a good foundation for cranberries. Oregon-grown cranberries have consistently excellent red color content valued by processors for blending. This high value industry occupies only 0.1% of the Coos County land area and much less than that in Curry. The average area planted in cranberries per farm is about 17 acres in the two-county area. Units range from one acre to more than 150 acres. Cranberry farms are also a market for beekeepers who offer pollination services. About 3,500 Oregon hives are placed on cranberry farms during bloom. Cranberry farms also utilize the services of several custom operators who build, prune, and resand beds. Local fabricators and machinists help to build specialized equipment for cranberry farming. About 1,675 acres were harvested in Coos County in 2009, producing a yield of 182 barrels per acre. One barrel equals 100 pounds of berries. U.S. cranberry yield in 2008 was 205 barrels per acre. Cranberries in Curry County account for 40% of Oregon production. About 1085 acres were harvested in 2009, with a yield per acre of 178 barrels. The cranberry beds are between Port Orford and Langlois in the northern part of the county . www. extension.oregonstate.edu/coos/node/228

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Wayne Everest always wanted to own a cranberry farm in Curry County. His construction business made that difficult until the recession hit the country in 2007. Working up to the eventual dream fulfillment, Wayne and his wife Bonnie, bought a small parcel in 2000, figuring they could work on it while Wayne worked toward retirement from his construction business.

the process of growing and harvesting cranberries is pretty much organic. The major difficulty in sustaining an organic label is the sloping geography of the region and heavy seasonal rainfall that allows neighboring farms’ runoff to flow into the bogs. The Everest cranberries are very close to being officially organic anyway because of the hands-on care the Everest family puts into them.

The recession came at a time that was right for a serious transition. Wayne’s dad Dick Everest already owned a few acres of cranberries before Wayne and Bonnie jumped in with both feet. Their farm is next to Wayne’s and makes a good family operation that also includes their son, 23 year-old Jonathan, who seems quite content with the idea of continuing the operation.

Oregon cranberries are about as good as cranberries can be. The growing season, sandy soil and mild temperatures allows for a higher sugar content and brighter colors than cranberries grown on the east coast of the country. The eastern competition is still tough, though. Out of competitive aggressiveness the eastern growers cover their lack of color and sugar in their cranberries by adding food coloring and sugars in their processing. Now it appears they are also creating a marketing effort to convince customers the dark red of Bandon cranberries is inferior to the pale to nearly white of the short-season east coast products. But, in business that’s just one of those things you must deal with. By: Greg Henderson, SOBJ

Cranberries are a difficult crop to initiate and one that is hard to replant. The vines can be twenty or thirty years old and don’t allow for much in the way of herbicides and other chemical treatments. That means

Southern Oregon Business Journal

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Mayors Must Be Policy Entrepreneurs By :John Lettieri

Number of Counties Accounting for Half of the Recovery-era Establishment Growth

The United States has a startup problem—one that encompasses the number of new firms being born, where those births take place and the demographics of who gets to participate in the startup economy. First, the numbers. Recently released data from the Census Bureau show that startups remain hovering near all-time lows when it comes to their share of both the U.S. business community and total employment. And, the total number of new firms launched each year has fallen as well—even as the economy grows larger and larger. Only 404,000 new firms were created in 2014, compared to an annual average of 498,000 from 1977 to 2008. To put that into perspective, in 1977 the U.S. economy generated 95 startups per $1 billion of GDP. By 2014, that ratio had fallen to only 25 startups.

Source: EIG analysis of U.S Census Bureau, County Business Patterns data

Number of Startups vs. Startups per $1 billion of Real GDP Women and minority entrepreneurs have historically received less than 10 percent of the country’s venture capital. For every nine men that raise equity financing to start and scale their business, only one woman does. Why do these trends matter? Because a less entrepreneurial economy is one with fewer opportunities to achieve the American Dream. EIG’s Distressed Communities Index found that business openings, job growth and economic well-being are intertwined down to the zip code level. Source: EIG analysis of U.S Census Bureau, Business Dynamics Statistics data

Not only is the rate of new business formation in decline, but the geography of entrepreneurship is contracting too. EIG’s research on the past three economic recoveries found the number of counties generating half of the country’s new business establishments fell from 125 in the 1990s to only 20 in the 2010s. Half of the country’s metro areas saw the number of new firm starts fall from 2013 to 2014, according to the latest Census data. The United States not only needs more new businesses in more regions, but it also needs to expand access to entrepreneurship as a career path. According to the Census Bureau's newly-released Annual Survey of Entrepreneurs, African Americans owned only 2 percent of the nation's companies with employees in 2014, and women owned only 20 percent. Southern Oregon Business Journal

Mayors must be at the vanguard of making U.S. entrepreneurship more demographically and geographically inclusive. The playbook to get started is clear:

Have a strategy. In the face of national headwinds, every mayor should have a startup strategy—one designed to strengthen the local ecosystem and place entrepreneurship at the center of a city’s economic development agenda. Mayors should support incubator, accelerator, mentorship and apprenticeship programs that aim to expand entrepreneurship’s reach. Programs like Venture for America show how to harness entrepreneurship toward multiple reinforcing ends: fostering economic growth, expanding access to opportunity and revitalizing urban neighborhoods.

Advocate. Mayors can be powerful advocates for their 15


startup communities’ needs at the state and federal level, particularly when it comes to pushing for incentives and regulatory policies that enhance the local entrepreneurial landscape. One such idea is the Investing in Opportunity Act, bipartisan federal legislation aimed at unlocking access to capital in communities starved for new enterprise. Mayors may not have a vote in Congress, but their voices matter to those who do.

The United States not only needs more new businesses in more regions, but it also needs to expand access to entrepreneurship as a career path.

Make it easier to start a business. State and local rules often present just as big a hindrance to would-be entrepreneurs as federal ones. One prime example is the growing morass of occupational licensing rules, which can unnecessarily prevent individuals in relatively low-wage sectors from establishing their own independent businesses.

In tackling America’s startup problem, mayors should emulate entrepreneurs themselves: be bold, move quickly and embrace new ideas. The good news is, from Cincinnati to Nashville to Salt Lake City, a new generation of mayors is leading a wave of creative approaches to fostering local entrepreneurship and building the next generation of new industries. As mayors work together to build a new playbook, their efforts will help ensure a more vibrant and inclusive future for U.S. entrepreneurship.

John Lettieri is the co-founder and senior director for policy and strategy at the Economic Innovation Group, where he leads EIG’s policy development, economic research, and legislative affairs efforts.

www.kauffman.org/blogs/authors/john-lettieri

Chamber Press Release By: Chrystal Vaughan

Attention Employers: Current Form I-9 valid until Jan. 21, 2017 On Aug. 25, 2016 the Office of Management and Budget (OMB) approved a revised Form I-9, Employment Eligibility Verification. USCIS must publish a revised form by Nov. 22, 2016. The new Form I-9 will include a number of changes designed to make the form more "user-friendly" and eliminate mistakes in the Employment Eligibility Verification process. These changes include the introduction of a 'smart' version of Form I-9 that can be accessed and completed on the USCIS website. The new Form, I-9 will resemble a more user-friendly PDF form with advanced drop-down options designed for easier form completion. In addition, the new Form I-9 will include a Quick Response Code (QR Code) for each form that can be used to streamline the government audit process. Employers will still be required to print Form I-9, obtain the appropriate employee and employer representative signatures, and retain Form I-9 according to Form I-9 retention requirements. Employers may continue using the current version of Form I-9 with a revision date of 03/31/2016 N until Jan. 21, 2017. After Jan. 21, 2017, all previous versions of Form I-9 will be invalid. In light of the upcoming changes to Form I-9 and the recent increase in I-9 related fines and penalties, employers should take this opportunity to do 3 things to ensure I-9 compliance: 1. Conduct an internal or external audit of at least a representative sampling of Form I-9s completed in the last three years, if such an audit has not been completed within the last five years, to evaluate existing employment authorization liability and identify existing compliance issues. 2. Schedule Form I-9 employment authorization training well in advance of January 22, 2017, for all HR personnel and all employees responsible for completion of Form I-9 on behalf of their employer 3. Contact any I-9 employment authorization vendors who currently provide Form I-9 completion or retention services, to ensure their compliance with the upcoming form change deadline. Employers who have not recently audited their I-9 records may already be subject to increased fines as noted below: The "Civil Monetary Penalties Inflation Adjustment" Final Rule took effect August 1, 2016, and significantly increased fines for Form I-9 errors. For the first offense, the maximum fine increased from $1,100 to $2,156 per Form I-9 violation. Fines for second and third offenses also increased significantly. The maximum penalty for Unfair Immigration-Related Employment Practices increased from $3,200 to $3,563 per charge.

Repeat offenders face a new maximum penalty of $21,563. It is important to note that although the Rule became effective on August 1, 2016, the increase to Form I-9 fines applies to all violations that took place after November 2, 2015. Southern Oregon Business Journal

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Empowering the Technology

Photo by David Gibb | dgibbphoto.com

of Healthcare

ASHLAND, OR— Headquartered in Southern Oregon, Plexis delivers enterprise core healthcare administration and claims management solutions to employer groups and

Jorge Yant, President & CEO Plexis Healthcare Systems www.plexishealth.org

healthcare payers throughout the United States and 15 countries, affecting over 70 million people worldwide. “At Plexis, our guiding mission is to create positive and meaningful change within the healthcare industry.” said Jorge Yant, founder, and CEO. Yant turned a bold idea into a Silicon Valley dream come true when he launched Plexis in 1996. From the beginning, he understood that half of the success of a healthcare company was the health and wellbeing of its employees, The standard of excellence across Plexis’ products and services is a clear reflection of the passion and talent that permeates Plexis’ culture. Plexis’ bold idea is to lower the cost of healthcare internationally, while also embracing the human side of the equation. They do so by dedicating significant resources to enhancing

“I see Plexicans appreciating and participating 47 in co-creating the culture we’ve nourished here at Plexis. Our corporate culture extends to our approach to customer relationships and partnerships which reflect our commitment to valued relationships, collaboration , and integrity.”

their claims management software, while at the same time developing integration solutions with technology leaders to ensure needs are met as quickly and efficiently as possible.

www.SouthernOregonEdge.com Southern Oregon Business Journal

by Southern Oregon Regional Economic Development Inc.

-Terri Coppersmith Vice-President, Finance Plexis Healthcare Systems (541) 773-8946 17


Southwestern Oregon Community College

DOWN TO BUSINESS A look at small business questions from the Southwestern Oregon Community College Small Business Development Center. By Arlene M. Soto CMA, CGBP Southwestern SBDC Director, asoto@socc.edu Q: My income last year was $25,000. I’d like to start a business to improve my lifestyle but I don’t have the capital I need. Are there any programs available to help me? Programs to help financially with starting a business depend on location and circumstances. In Coos, Curry and Douglas Counties the Dream$avers program through NeighborWorks Umpqua might be a solution for funding a startup business. It will take some time and some work but the program is designed to match personal savings with a three to one grant to purchase a home, pay for an education or invest in an approved small business. Dream$avers is an “individual development account (IDA)”. Low income individuals in the program set a savings goal, create a savings account through the program and create a business plan describing how the funds will be used to further the goals of their business. For every $1 saved, the Dream$avers program will match it with $3 in grant funding once the savings goal is reached. Imagine how quickly the funds necessary to get started on that dream business will accumulate at that rate. More information about Dream$avers is available at: www.nwumpqua.org/services/save-money/ dreamsavers/. Eligibility for the Dream$avers program includes: 

Be an Oregon resident 12 years or older

Be a member of a household that meets the income and net worth limits which can be found on the NeighborWorks Umpqua website at: http://www.nwumpqua.org.

Be interested in saving for one of the five approved savings goals.

Southern Oregon Business Journal

Be willing and able to save for a minimum of 6 months and a maximum of 36 months to reach a set goal.

Must reside in the region served by NeighborWorks Umpqua.

Money for starting a business is not the only service NeighborWorks Umpqua provides to entrepreneurs. Participants also receive training and mentoring on a range of topics including: financial fitness and business planning.

If Dream$avers seems to be a good funding option for getting started in business, the first step to move forward is to contact NeighborWorks Umpqua at 541671-5842 or http://www.nwumpqua.org about eligibility and to confirm the business project is a good fit for the program. If Dream$avers is not a good fit because of location, there is another individual account (IDA) option in Oregon through MercyCorps Northwest at: www.mercycorpsnw.org/business/ida/. MercyCorps Northwest only considers the first 75 applications they receive during each of the four open enrollment periods during the year. Those enrollment periods close in February, May, August and November. The best place to learn more about this program is on the MercyCorps Northwest website. Other options may be available through the Oregon Department of Vocational Rehabilitation, veterans’ organizations and local support organizations. Contact the Small Business Development Center www.BizCenter.org to find resources available locally.

Arlene M. Soto has been the Director of the Southwestern Small Business Development Center since July 2007.

The SBDC is a partnership of the U.S. Small Business Administration, the Oregon Small Business Development Center Network, the Oregon Business Development Department and Southwestern Oregon Community College.

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Crash and Burn: Your Next Steps After Failure By: James C. Price in Inspiration and Motivation

If you have ever dared to dream mighty dreams, to pursue goals of grandeur—to not just imagine, but to chase down success—chances are you have failed at least once in one of your pursuits. Often, we jump, taking a leap of faith, not knowing whether or not we will be able to fly. Many, paralyzed by the fear of failure, play it safe in their careers, never experiencing the thrill of realizing seemingly unachievable dreams. In cases like these, those who never experience failure, in actuality, fail to ever begin. But, if you are one of the select few who have chased a dream and failed, take heart. If you aren’t failing, you aren’t trying. So, it’s time to pull yourself up by the bootstraps and keep going. Yes, you crashed and burned, but as Winston Churchill once said, “failure is not fatal.” Get up, brush yourself off, and take these next steps toward success. Allow the weight of the failure to hit you … but don’t dwell. Whether you lost a major client or your side hustle failed, acting as if the letdown was insignificant doesn’t help you grow from your mistakes or shortcomings— it’s merely a delusion that will sidetrack you from your end goal. Take some time to feel the weight of it all. Meditate on how the result negatively affected your psyche, emotions, and selfconcept. Take those feelings and understand that these emotions don’t define you. You are not a failure because you failed. Because you failed, you are one step closer to success. Abraham Lincoln, who failed several times before being elected president put it this way: “My great concern is not whether you have failed, but whether you are content with your failure.” Try to understand what went wrong. Once you can look at the situation with a crisp, sober mind, it is important to go over the entire process. Outlining or journaling the journey from start to finish will help you see the big picture with step-by-step precision. Starting with the original moment of idea conception, go through the brainstorming process, and then, map out how you planned to achieve your idea. If you had confidants or reached out to investors, break down how you approached your peers and business partners. Once you’ve gone through the beginning, write out how you launched the idea and what you did to keep it going. This process could be as concise as a single page or as thorough as 10—the point is to capture everything you controlled during your trial. After this is completed, decide where you went wrong.

Southern Oregon Business Journal

Decide what you can do better. This next step may be the most important part of your goal reassertion. Knowing why you failed can only positively affect your success if you actually do something about it. Decide what you can do better, how you can right the wrongs of the past attempt. There’s always a better way of doing things—look for it or create it. In business as in life, you can only control your actions; you can’t control other people’s. However, you can control how you react to others’ actions. If your failures were caused by an outside party, determine what you could have done better to counteract the attack on your idea. It could be as vague as a season of bull economy that kept your market leery of getting on your bandwagon, or it could be as specific as a competitor stealing market share. Regardless of the outside factor, determine what you could have done differently to combat it. Reevaluate your end goals. After you make adjustments to your game plan, you may need to reevaluate your end goals. Are they still applicable to your current situation? Do you still want the specific result you were striving for, or did your failure evaluation open your mind to different, and possibly, better ideas? One famous example of this is what a scientist at office supply company 3M experienced. He was tasked to develop an adhesive, but after one failed attempt after another, his adhesive wasn’t permanent. It would stay on the paper but not bind the paper to another object. By reconsidering what he was trying to accomplish, he was able to change the goal to a semipermanent adhesive, which became the prototype to Post -it Notes used in homes and businesses across the world. Steel yourself and begin again. Failure can be a major mental setback in your journey, but by understanding its effects on you, determining what went wrong, deciding what you can do differently, and reevaluating your goals, you are one step closer to success—although, that one step may be the hardest step to take. Peers and co-workers may judge you and you may second-guess yourself, but as the Greek philosopher Epictetus once said, “If you want to improve, be content to be thought foolish.” In the end, it is the foolish dreamer who, through action, achieves the success that the one playing it safe never will. Yes, you crashed and burned, but it’s time to look forward toward the end goal—you are now one step closer to success.

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Southern Oregon Business Journal

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UNCOMMON SENSE: IF YOUR CATEGORY IS TOO CROWDED, EXPAND IT WITH DEMAND-DRIVEN INNOVATION

By: Martin Moore, VP, Nielsen Innovation Practice

To state the obvious,

brand managers spend their days looking for ways to grow their brands—and today they have more tools at their disposal than ever before. The challenge of media fragmentation matched with the opportunity provided by big data have come together to give brand managers the ability to target specific “micro” audiences with more tailored messaging, resulting in more efficient growth. These tools provide the most impact for brands in emerging categories that are still attracting new consumers or in categories with “expandable” consumption—categories in which consumers might conceivably use more of a product over the same time period, whether by increasing consumption on a given occasion or increasing occasions of consumption. In these cases, there’s an opportunity to grow not only the brand, but the category as well, because you’re attracting new buyers or you’re able to generate more value from current buyers.

changing tastes, but often as the deliberate result of one brand’s ingenuity. In fact, a category that appears stable may be one critical innovation away from awarding one brand a significant long-term advantage. For example, if you had asked someone in 1998 if they could envision an innovation that would change the way America thought about mops, you would have received some odd looks—most people probably thought America didn’t think about mops at all. But lo and behold, in July 1999, Procter & Gamble (P&G) launched the Swiffer, completely upending the crowded mop and home cleaning categories. In the final four months of that year, the Swiffer generated more than $100 million in global retail sales. It has successfully grown the brand with new products and line extensions. In fact, if you hit “view all” on the Swiffer website today, you will see 36 distinct products. As of 2015, Swiffer was one of P&G’s 20-odd brands generating $500 million to $1 billion in global revenue. The Swiffer story has been told many times, but the core of its success rests in one of those observations that seem obvious once made, but often go unobserved for many years; mops provided a far from ideal experience—cleaning with them was a physically demanding experience and, for all the effort required, they were not even very good at cleaning floors. Consumers didn’t like how wet they made the floor, how they tended to just move dirty water around, how difficult it was to avoid splashing dirty water on oneself, how they required lugging a bucket around, how exerting it was too lift and drag around a saturated mop, and how time-consuming the process was.

However, for brands in crowded categories, growing the category often does not seem possible, and brand growth in this environment is hard-won: it requires luring consumers away from your competitors. Brands that do this often begin with an increase in their advertising spend, which only prompts competitors to do the same. The result is an onerous arms race that’s simply not sustainable in the long run. It gets worse. When the warring brands have depleted their marketing budgets, they lean heavily on price promotion. Consumers promptly acclimate to the ever-present deals, switching among brands based on which one is cheaper this week, transforming promotion from a brand strategy to a consumer expectation that must be met. A sorry additional effect of this dynamic is that it leads the consumer to think of price as a key differentiator. At this point, private-label establishes itself as a stronger threat. The situation sounds hopeless, but there’s another pathway to growth. Even the most established categories change over time— and not simply in a passive sense, driven by consumers’ Southern Oregon Business Journal

In short, Swiffer’s creators realized that consumers were making many compromises in order to get the job of cleaning the floor done. It’s a perfect recipe for innovation, so it’s no surprise that Swiffer embodies the core principle of demand-driven innovation: if a brand can pinpoint a circumstance in which consumers are struggling because current offerings don’t provide a satisfactory solution, and tailor a better solution to this circumstance, they have a high chance of launching a hugely successful innovation. Demand-driven innovation is so powerful that it might seem surprising that many companies start with an idea they think is great, and then try and sell it. 21


Uncommon Sense (Cont.) it. In reality, this supply-driven thinking is the rule rather than the exception. To a man with a hammer, everything looks like a nail—but it’s far better to examine all these things that the man with the hammer is banging away at, and design tools that will suit them better. A recent Nielsen study confirms the critical importance of identifying and articulating a “circumstance of struggle” that resonates with consumers. Researchers analyzed more than 600 product concepts in 60 categories and 30 countries and found that those concepts which clearly conveyed the circumstance—including who was struggling, as well as when and where—performed 58% better with consumers than those without this information. But how many unresolved circumstances of struggle are there really to be found in a crowded category? Haven’t consumers’ various needs already been met? In all likelihood, the answer is no; circumstances of struggle often hide in plain sight. To uncover them, here are a few things to look for: Trade-offs: Are there circumstances in which consumers are forced to choose between imperfect alternatives? Cat owners had long been forced to choose between purchasing litter in smaller quantities, requiring more frequent trips to the store and a larger outlay, or lugging heavy value packs that were physically difficult to maneuver. Tidy Cats Lightweight resolved this trade-off by creating a litter that was just as effective as traditional litter but only half the weight. Unexpected uses: Are consumers using products in unexpected ways that yield benefits the manufacturer had not anticipated? The Mountain Dew team noticed that consumers used their product in the mornings more often than they had expected—and sometimes added orange juice to make it a more “suitable” morning drink. As it turns out, many consumers who didn’t have a taste for coffee were still looking for a way to get moving in the morning. As a result of this insight, Mountain Dew launched Kickstart, a caffeinated, carbonated soft drink with juice that specifically targeted the morning usage occasion; it exceeded $300 million in sales by the end of its second year. In a similar vein, the Nyquil team noticed that consumers were taking Nyquil when they didn’t have a cold if they needed a good night’s sleep—and thus, ZzzQuil was born. Surprising combinations: Are consumers combining products in unexpected ways to create a solution that no existing product offers? Bud Light discovered it could attract a large number of new consumers—including more women—by marrying beer with margaritas in its Bud Light Lime-A-Ritas offering. The combination made beer more approachable to non-beer drinkers and made margaritas a better fit for casual social gatherings such as barbecues. In the case of Chobani Flip, the very act of combining ingredients became an integral part of the product experience. The Southern Oregon Business Journal

Chobani team noticed the rising trend of “deconstructed” desserts at popular restaurants. By applying this concept to the category—adding a sidecar of interesting toppings with different tastes and textures to yogurt packages—the Chobani team transcended the breakfast usage occasion, encouraging consumers to think of Chobani Flip as both a healthy snack and a craveable dessert. As a result, 46% of Chobani Flip buyers are recent converts to the Greek yogurt category. Product benefits that could become a full-blown “experience”: Can you unlock opportunity by shifting focus from “configuring a bundle of benefits” to “delivering a desired experience”? Magnum managed to re-energize the ice cream category with an apparently not-so-revolutionary product: chocolate-covered vanilla ice cream bars.

But by focusing the messaging on the various emotional dimensions of indulgence—glamour, decadence, and even sexiness—Magnum uncovered super-premium benefits in a “plain vanilla” product, and brought them to mainstream ice cream buyers who rewarded the brand with $225 million in sales during its second year. These runaway successes all hail from mature categories: soft drinks, cat litter, home cleaning and ice cream, where many would have considered breakthrough innovation of this magnitude to be impossible. All these successes began by looking for a specific circumstance of struggle, compromise or unfulfilled aspiration in consumers’ lives, and then working to resolve it in a markedly better way than existing solutions were doing. In this way, small consumer moments can drive big opportunities in crowded categories. http://www.nielsen.com/bd/en/insights/news/2016/uncommon -sense-if-your-category-is-too-crowded-expand-it-with-demanddriven-innovation.html

Nielsen is a leading global provider of information and insights into what consumers watch and buy. Nielsen, a global information and measurement company

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Rogue Valley’s Economic Activity on the Upswing

By: Guy Tauer The Federal Bureau of Economic Analysis (BEA) recently published the Gross Domestic Product (GDP) estimates for 2015. These preliminary estimates showed solid growth in economic output for the Grants Pass and Medford metropolitan areas (Jackson and Josephine counties). Rates of growth were not too surprising considering the levels of job growth over the same period. In fact, Josephine County had the 29th fastest GDP growth among 292 U.S. metro areas. Josephine's GDP growth rate was 4.7 percent from 2014 to 2015, almost double the U.S. metro area average of 2.5 percent increase. Jackson County had the 86th fastest growth among all metro areas over that time. Even as U.S. metro area economies were expanding following the end of the Great Recession in 2011, it took until 2014 before Josephine County's GDP showed an increase.

Southern Oregon Business Journal

As a reminder, gross domestic product represents an estimate of the total dollar value of all goods and services produced in a given geography over a specific time. It is the economy's output. The majority of this output is market production, meaning those goods and services produced for sale in the market. However, a portion of GDP is non-market production, such as education services provided by local governments or management of our public lands. Gross domestic product is equal to the value of final goods. For instance, if a business produces cogs (intermediate product) for clocks (final product) then their production is not directly counted in GDP. Instead GDP measures the value of the clock (final product), which theoretically includes the production value of the individual cog.

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Rogue Valley’s Economics (Cont.) Jackson County's gross domestic product rose to $7.16 billion in 2015. Levels of production in our economy are relatively small compared with other metropolitan areas, ranking 241st out of 382 metro areas nationally, just behind Bend MSA's total GDP ranking. Jackson County's GDP rose by $379 million from 2014 to 2015. Josephine's increased by $132 million to reach $2.02 billion, impressive increases for an economy the size of the Rogue Valley's. In terms of GDP growth rates, over the past five years Jackson County ranked 159th out of 382 areas. Josephine's five-year growth rate ranking was a bit lower, at 250th among U.S. metro areas. Despite the rapid growth in GDP, levels of economic activity remain below pre-recession levels. Josephine County GDP figures were $130 million lower than the previous peak in 2006, in inflation-adjusted dollars. Jackson County's 2015 GDP was $556 million below the peak in 2006. Although total economic output remains below pre-recession levels, total nonfarm employment regained nearly those prerecession levels by August 2016. One reason that the Rogue Valley economy has yet to each peak inflation-adjusted levels of economic output is the nature of the last recession and what led up to such a steep drop once the recession hit. The Rogue Valley, particularly the Medford MSA (Jackson County) has been frequently cited as one of the "housing bust metro areas."

Local Knowledge. Regional Leader AmeriTitle began as a single office in Klamath Falls, Oregon in 1985. Today, AmeriTitle has 42 offices in 3 states: Idaho, Oregon and Washington.

With such a frothy housing market, soaring prices and construction activity during the mid-2000s, the Great Recession and associated housing bust and decline in construction, real estate and finance activity was particularly acute in the Rogue Valley. All of these factors have conspired to create additional hurdles to reach pre-recession levels of overall economic output in the Rogue Valley. Faster growth in the Rogue Valley's GDP over the past year was due to continued growth in health care and social assistance, which contributed the largest share of GDP growth in both counties. Financial activities and professional and business services also contributed to economic output in Jackson and Josephine counties. Construction is still contributing very little to GDP growth. Construction contributed just 5 percent of Josephine's GDP growth and none of Jackson County's in 2015. As employment continues its strong gains in 2016, it is probable that the Rogue Valley's GDP growth will show continued expansion as well when the data are released in September 2017 . Guy Tauer Regional Economist Jackson and Josephine counties 100 E. Main Street , Suite A Medford, OR 97501 guy.r.tauer@oregon.gov

Southern Oregon Business Journal

1495 NW Garden Valley Blvd. Roseburg, OR 97470 Ph: (541) 672-6651 Fax: (541) 672-5793 Barry Robinson General Manager barry@ameri-title.com

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By: Scott A. Shumway, President Cropper Medical

The Theory of Constraints (TOC) is the creation of Dr. Eliyahu M. Goldratt, an Israeli physicist, educator, and management specialist. He introduced this theory in 1984 with his bestselling book titled The Goal. The idea of TOC is based on the concept that a chain is only as strong as its weakest link. It does not matter how strong all of the “heavy-duty” links are. One weak link determines the strength of the entire chain. If you were going to pull a car out of a ditch and you had a really strong chain and one link was made out of a wire tie, do you think that you could get the car out? What good then is the rest of the chain? TOC tells us that a system is limited from achieving more of its goal because of a small number of weak links or constraints or bottlenecks (usually one but more may exist). There is always at least one “constraint” in every organization. TOC uses a focusing process to identify the constraint and restructure the rest of the organization around the constraint to achieve its goal. Change the one weak link and you will change the entire chain. This is a powerful principle that must be understood.

In Dr. Goldratt’s book “The Goal”, Alex Rogo, the plant manager of UniCo runs into an old physicist at the O’Hare airport in Chicago from his college days. His name is Jonah. With excitement, Alex tells Jonah about his job and the great improvements and increase in productivity he has made with the installation of robots at his plant. Jonah then proceeds to tear Alex apart with a series of questions about his productivity measurements. Jonah’s interrogation leaves Alex utterly speechless. In realty, Jonah is right; Alex’s plant is in financial trouble despite all the new technology and measured productivity improvements. Jonah then tells Alex “your problem is that you don’t know what the goal is. And, by the way, there is only one goal, no matter what the company.” Jonah then turns and walks into the jet way to catch his plane, leaving Alex in the terminal to ponder on this impactful statement. What do you think “The Goal” of every for profit company is? Why is it important to clearly understand what “The Goal” is?

In order to better answer these questions about the goal, we first have to talk about the concept of flow. Flow is vitally important to the success and growth of any organization. Let’s look at an example and ask a few questions in order to better understand the principle of bottlenecks and flow. The diagram below represents a water pipe with three bottlenecks. The arrows show the amount of water flowing through the pipe. 

Which bottleneck determines the flow of water through the entire pipe (1, 2, or 3)?

What would happen if we worked on bottleneck three and made its rate of flow equal to the flow of the first bottleneck?

What would happen if we worked on the flow of the first bottleneck only and made it have more capacity?

If we worked on bottleneck two, what would we want to change its flow capacity to? Why?

Southern Oregon Business Journal

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If we have been thinking correctly and have focused on the real bottleneck, what would be the result of our efforts in the example above? The answer is simple: increased throughput. The bottleneck determines the throughput of the entire system. When we focus on the bottleneck and increase its throughput, we naturally see an increase in the throughput of the entire system.

Throughput lost at the bottleneck is throughput lost throughout the entire system. Throughput lost at a non-bottleneck is just a mirage! In the Theory of Constraints, throughput is defined as “the rate at which the system generates money through sales.� A constraint is defined as anything that prevents the system from attaining its goal. If we make products but do not sell them, that is not throughput. That is just the waste of overproduction and inventory. If we think about throughput, we are thinking about generating money, not products. The more throughput a company has the more money it is generating. In other words, money is flowing into the company and the company is achieving its goal! Scott A Shumway, President of Cropper Medical Inc. - Scott has over 24 years of TOC and has improved gross margins by five points through using TOC. CROPPER MEDICAL, INC. 240 E Hersey St Ste 2 Ashland, OR, 97520 United States

Southern Oregon Business Journal

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First LAUNCH Ashland PubTalk Blows the Doors Out! Our first LAUNCH Ashland PubTalk, held at the Standing Stone Brewing Company on Tuesday, October 18, gathered a crowd of over 55 members of Ashland’s entrepreneurial community. Start-ups, potential investors and other interested parties gathered to hear local Angel Investors give their thoughts and answer questions about what they are looking for when they consider investing in a new company. SOREDI’s Communication Manager, Codi Spodnik says, “Wow! Ashland really turned it out tonight! We thought we’d be lucky to have half this many people. I’m so excited to see how motivated Ashlanders are about supporting new businesses!” Spodnik continues, “The Standing Stone was so thoughtful and patient in working with this great turn out. They had not originally planned on letting us go out onto the back porch, but they let us do that, rather than turning anyone away. I’m sorry that we had to cut our program a little but, it did get cold and dark out there eventually. I really appreciate that our guests were flexible with us. Since this first one was a bit of an experiment, we really learned what kind of venue we are going to need to find in order to continue. It’s our hope that we can find more than one possibility so that we can move these around and keep it feeling fun like this!” The next LAUNCH Ashland PubTalk will be held on Tuesday, November 15, 2016. The program will consist of experienced entrepreneurs sharing their stories, with time for attendees to speak about their companies for a few minutes each. The location will be determined shortly, as it is evident that it will need to be a larger space than the Standing Stone had available last Tuesday. Any companies, restaurants, or pubs that would like to offer their space for this event should contact Codi Spodnik at SOREDI by e-mailing codi@soredi.org. SOREDI Venture Catalyst, Tim Root and Steve Vincent of Avista Utilities work together to hold regular Angel Investor meetings so that Angels can learn about new companies. Any start-up company that is seeking Angel Investment or anyone interesting in learning more about becoming an Angel Investor, should contact Tim Root by e-mailing tim@soredi.org. About LAUNCH Ashland: LAUNCH Ashland is an initiative of SOREDI, made possible with funds from the City of Ashland and the Oregon Community Foundation and partnership with Southern Oregon University and the Small Business Development Center in order to focus resources on growing new scalable enterprises in the Ashland area from concept to first revenue, with the ultimate goal of creating new, sustainable employment opportunities locally. About SOREDI: SOREDI is a private, membership-based, non-profit organization, governed by a board of directors. Its seven-person staff is charged with local business expansion and new business recruitment efforts, financial assistance to start-up companies through its business loan fund, and management of Enterprise Zones in Jackson and Josephine Counties. The agency was formed as a regional economic development agency in 1987. Learn more at http://www.soredi.org.

Southern Oregon Business Journal

27


“Wait until next year”

If you pay any attention to major league baseball you probably know the Chicago Cubs are going to the World Series this year. The last time they went was in 1945 when America was still celebrating the end of World War II, 71 years ago. Maybe that’s a long time to wait. Maybe it’s a test of loyalty, faith and perseverance. For Cubs fans around the world, I’m glad for you. You and I engage in activities all the time that leave us with the realization that things today just didn’t work out somehow. Many, many times we don’t give up trying but hold on to a thread of encouraging self-talk by saying “maybe tomorrow” or “maybe next year”. Quitting is wrong in our culture, placing hope and confidence in the future is not. That’s the reason businesses hang on when hanging on seems silly to the passers-by. For all those small business people and entrepreneurs who are telling themselves to hang on and to wait until next year, the Chicago Cubs are resounding proof that perseverance is a good thing, even when next year comes 71 years late. But, it’s the fans not the heroes on the field of play, who’ve been waiting and cheering and scrambling for foul balls that a hero might sign that truly should be recognized. Some have been sitting in the same seats their grandfathers sat in, waiting for next year. Many of the players will say the reason they keep trying is for the fans. It’s the people in the crowd that keep the players going, especially in bad times. They know that someday it’s all going to be worth it. Watch your customers. They are your fans and always will be. If you have one of those days when you would rather hang a closed sign on the door than go to work, remember your fans. They will cheer for you when things are going well, and even brag to others about knowing you. They would ask for your autograph when you should be asking for theirs. They will be your customer in the worst of times and your advocate all the time. If you don’t enjoy being in business for your sake, learn to enjoy it for their sake. I don’t know where it goes, but sometimes we lose our focus. We forget why we’re doing what we do and for whom we’re doing it. There is no pleasure in being out of focus and an incredible amount of energy and joy in being in focus. Someone’s grandchild is sitting in a seat he reserved in 1946 because he missed the games in 1945 but knew his team would be there next year. Next year is now, Greg Henderson greg@southernoregonbusiness.com

Southern Oregon Business Journal

28

November 2016  

Southern Oregon Business Journal

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