Author Archives: Don Weiner

The Ubiquitous Topic Of Green Is Popular For A Reason — It Works

The Ubiquitous Topic Of Green Is Popular For A Reason — It Works

Lake Superior State University may not be too well-known, but it does generate some publicity each year with the release of its annual List of Words to be Banished from the Queen’s English for Mis-use, Over-use and General Uselessness.

Those who tire of hearing or reading certain words and phrases go to the Michigan university’s Web site and nominate them for consideration. The big losers for 2009 are the word “green” and such related phrases as “going green.”

Good luck with getting those banished — especially in Arizona.

Many who have been beating the drum for energy efficiency, water conservation and sustainable business practices have found willing ears in executive suites across the state.

General Dynamics C4 Systems in Scottsdale is just one company that has proactively embraced standards set forth by the U.S. Green Building Council under its Leadership in Energy and Environmental Design, or LEED, Green Building Rating System.

Genesis Worldwide Enterprises in Cottonwood took a bold step forward in 2005, when it installed an 84-kilowatt photovoltaic power system, which then became the second-largest private commercial solar power system ever installed in Arizona.

It’s impossible to log onto Web sites for such utility companies as Arizona Public Service, Salt River Project or Tucson Electric Power without being directed to information about their green programs and services.

And if none of that is convincing enough, consider this. Light rail has come to the Valley of the Sun with the debut of a 20-mile, $1.4 billion system in late December.

Granted, these are just some of the steps Arizona businesses and municipalities are taking along the road to sustainability. But they are important steps.

“We could get a lot better than we are, but we’re doing pretty darn good,” says Charles Popeck, president and CEO of Green Ideas Inc., an environmental building consulting firm in Phoenix, and one of the founders of the USGBC’s Arizona chapter.

And Popeck sees a general acceptance of sustainability principles throughout the Arizona business community, not just among specific industries such as high-tech firms.

“I’d have to say it’s across the board. Everyone seems to be catching onto it,” he says. “The reason is it’s just common sense. I mean, how can you argue with saving water and saving energy?”

Bonnie Richardson, the new chair of USGBC Arizona, believes the decision to go green usually starts at the top.

“I think it really comes from the corporate philosophy,” she says. “I do think that folks in high-tech businesses have been exposed to more of the new ideas and so they tend to be more willing to embrace and try things out. However, I think we’re now at that tipping point where it just makes good financial sense for businesses to do this, and that’s where it’s going to be a lot easier for people to adopt it.”

John Neville, a sustainable systems consultant and president of the Sedona-based networking organization Sustainable Arizona, emphasizes those financial considerations in terms of a willingness to go green.

“Sustainability means the ability to last,” he says. “And if you look at your business and make business decisions based on the idea that you’re going to last a long time, then you look at your expenses and your income in a different way. If all you’re concerned about is next quarter, then you make your business decisions differently and you’re not going to be sustainable.”

When LEED-accredited professionals like Popeck, Richardson and Neville talk about sustainability and business, they oftentimes are referring to companies and institutions that are seeking one of the various levels of LEED certification.

According to the USGBC, “LEED promotes a whole-building approach to sustainability by recognizing performance in five key areas of human and environmental health: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality.”

In fact, the nationally recognized LEED certification system is not just restricted to new construction. There are ratings programs for existing buildings, schools, commercial interiors and retail spaces among several others. Each category has a specific checklist that earns points for applicants. The more points earned, the higher the rating level with basic certification at the low end and the LEED Platinum level at the top.

Those going for new-building certification can earn points, for example, by locating a building on a site that accommodates alternative transportation methods for its employees, maximizes open spaces, utilizes water-efficient landscaping, has on-site sources of renewable energy and implements a construction waste management program.

USGBC Arizona includes a statewide list of completed LEED-certified projects on its Web site.

Popeck argues that green buildings are no more expensive than any other type of new construction.

“I think the biggest misconception out there is that it has to cost more upfront. It certainly does not,” he says.

When costs go up, it’s usually because someone decided to go for LEED certification well after the design process got under way.

“That is a typical problem out there and then people say, ‘Well green building costs more.’ Well it doesn’t really cost more,” Popeck says. “It’s because you designed your building twice that it cost more.”

Companies can recoup some of the expenses involved in greening their buildings through government tax credits and utility company rebate programs. But there are also significant savings from taking a green approach. This can include lowering the price of energy and water, as well as trimming shipping costs by sourcing construction materials locally or rethinking product packaging.

So why isn’t everyone going green these days?

“Of course, the downturn economically has hurt us,” Richardson says. “But I don’t think it was particular to green building. I think it was just across the board because our construction industry here was really devastated and it’s going to take some time for all of that to come back.

“So we’re no different than any other part of the country where the downturn is slowing growth for some of our new businesses and also, perhaps, people aren’t confident to make big investments at this moment.”

Neville seconds that.

“Everyone kind of pulls in during an economic slowdown,” he says. “It’s difficult at times when you have cash-flow issues. It’s very difficult.”

Neville is certainly not opposed to companies jumping into the green movement with both feet, but in some situations he thinks it’s actually better for companies to take incremental steps.

When he works with a business or government entity, they start out by analyzing the organization’s mission.

Neville outlined the process: “You take a look at, ‘What am I trying to accomplish here? How does my business work?’ Whether it’s a business or running a city or running a school, you say: ‘How does this work? What are all my businesses processes? What are the things that really please the customer?’ And then, ‘How can I do those and get rid of the other things that I’m doing that are ridiculous?’

”He points to a printer who saved money while going green by switching from inks containing volatile organic compounds. This eliminated the need for filing a toxic release inventory report every year, which involved hiring an outside firm to conduct an audit.
“Going green is getting better at your job. It’s doing your business better,” Neville says. “Becoming more sustainable is becoming a higher-quality business, a more efficient and effective business. That’s really what it is.”

Richardson, who works as an architect and principal planner for Tempe’s transportation division, says it’s important for those promoting sustainability to make outreach and educational efforts during a downturn.

“As we recover, there will be people with a lot more ideas about what they want to do with their business and what direction they want to go,” she says. “What’s really interesting is that once you get people looking into it, they recognize that there’s significant savings for businesses that decide to grow their business green.”

Anthony Floyd, another LEED-accredited professional, manages Scottsdale’s green building program. His city does a lot more than just talk the talk when it comes to environmentally responsible building.

In 2005, Scottsdale passed a resolution mandating that the city adopt a LEED Gold policy for designing, building and constructing new municipal facilities. The Granite Reef Senior Center, which opened in 2006, became the city’s first such building to earn LEED Gold certification. There is a new fire station that was going through the certification process earlier this year.

The Scottsdale green building program is primarily a residential program, but it plays an important role in terms of influencing commercial entities.

“When we started the residential program, after a few years of that we realized that we needed to start practicing what we were preaching,” Floyd says.

They set the bar high, he says, because “we realized we need to lead by example.”

Floyd serves as a green-strategies resource for various Scottsdale departments, other Arizona communities and numerous organizations. In early 2008, he put together a report for the AZ Minority Green Business Conference titled “Greening the Building Process.”

The report contains pertinent strategies, facts and figures. But it also covers a practice known as “greenwashing.”

“It’s just like whitewashing,” Floyd says. “I mean, there are a lot of companies out there that are advertising themselves as being green. But you really have to look deeper.

“There are multiple attributes to green building and there are shades of green.”

Like manufacturers that freely trumpet the sometimes debatable health benefits of their products, there are others who “mislead consumers regarding the environmental practices of a company or the environmental benefits of a product or service.”

Floyd uses the example of a business that may have sourced some construction material locally and uses that as a reason to promote itself as being green.

“But that’s greenwashing,” he says. “Just one particular product is not going to make a building green. It’s about the strategy and the design, and the combination of materials and resources that determines the overall greenness of the project.

“You can’t just look at water and say you’re green. You can’t just look at energy and say you’re green. In a building, you have to look at everything.”

But water and energy are two important considerations in Arizona, where the first may be scarce before long and the second can be extremely costly during summertime.

“In most of the LEED buildings that are being done, there is real focus on both water and energy,” Richardson says. “And that’s a new tack for Arizona.”

There are various ways to trim the use of potable water, such as installing low-flow fixtures and waterless urinals, harvesting rainwater and landscaping with native plants as Tempe does at its new transportation center.

“As long as water is relatively inexpensive, it’s a little harder to make the case that that investment turns around quickly,” Richardson says. “But I think over the next five years, there’s going to be a lot more discussion about how valuable water is in the desert and how we really need to change attitudes about managing it in a better way.”

Water efficiency is a major issue for Popeck. “It’s my pet peeve, really,” he says. “Yet every time you go into one of these project team meetings, you know, no one seems to get it. Everyone thinks the water’s unlimited. And it’s just really not.”

The need for energy efficiency and renewable energy are not just arguments coming out of Washington, D.C., these days.
Neville likes to say that the least expensive energy around is energy you don’t use. Energy is among the highest expenses on business ledgers.

“Whenever possible,” he wrote in a Sustainable Arizona position paper, “developments should incorporate energy technologies that rely on available, renewable, clean energy sources, such as solar, wind, ground-source, geothermal and other beneficial resources.”

Floyd is similarly inclined.

“If you’re green and you’re in Arizona, you need to be doing renewable energy,” he says. “It’s not an option. If you’re green, you should be generating a portion of your electricity using solar.”

There’s another, equally important part to this strategy, Floyd argues: “You need to start by reducing your energy load by being energy efficient. And then once you do that, you get a bigger bang from your solar buck.”

Companies Can Get Better Understanding Of Customer Experiences Through Service Blueprinting

Companies Can Get Better Understanding Of Customer Experiences Through Service Blueprinting

Not too long ago, Mike Tully discovered something important about the perception of time. The AAA Arizona president and others in his organization were not on the same clock as members requesting roadside assistance.

AAA Arizona measured effective responses from the point when its personnel dispatched tow trucks until those trucks actually arrived on the scene. Members started their countdowns from the moment they phoned in for help. Sometimes that meant a difference of eight or nine minutes — something that became abundantly clear when members called back before tow trucks even hit the road.

Fortunately, AAA Arizona and many other businesses are now gaining important customer-experience insights through a technique called “service blueprinting,” which asks organizations to evaluate and improve services by looking at them through the eyes of customers.
The concept of utilizing the customer’s perspective to develop a comprehensive service blueprint dates back several decades to a technique first discussed by G. Lynn Shostack, a one-time Citibank vice president, in the Harvard Business Review. The tool has evolved through the years and, now, has been outlined in great detail by three researchers with ties to Arizona State University’s W.P. Carey School of Business.

“Service Blueprinting: A Practical Technique for Service Innovation,” was published in the California Management Review this past May and co-authored by Mary Jo Bitner, Amy L. Ostrom and Felicia N. Morgan. Bitner is academic director for ASU’s Center for Leadership Services and the PetSmart Chair in Services Leadership at the W.P. Carey School of Business, while Ostrom is an associate marketing professor there. Morgan, a former ASU doctoral student, is an assistant marketing professor at the University of West Florida.

In working with companies, Ostrom says, it became apparent there was a need for an in-depth paper that included case studies of businesses that used blueprinting and realized its value.

“The technique, in a broad sense, is really focused on having people internally within an organization come together to help them really understand what it is they’re offering to the marketplace,” Ostrom says.

The objective is to get a handle on the actual customer experience and look for ways to improve and innovate. It involves mapping everything from face-to-face customer contact to behind-the-scenes support services.

“You end up getting a very, very clear diagram of what the customer’s walking through,” Tully says.

AAA Arizona was able to identify something of an annoyance for customers dealing with different departments. As a company that provides multiple products ranging from insurance to travel assistance, it’s not unusual for members to take care of different needs on a single call. AAA discovered customers were being asked to provide the same membership information each time their call was transferred from one department to another.

The organization now has a vice president who works on tightening up the service encounter for customers, eliminating any unnecessary hoops they’re being asked to jump through.

The benefits of a service blueprint can be wide-ranging. Organizations are able to chart how they provide services to customers, and then compare those findings with competitors’ practices.

“When you’re able to do things that customers value and do them better than your competitors, I think in general, that puts you in a much better situation,” Ostrom says.

Although some companies already make considerable efforts to understand their customers’ needs, oftentimes they don’t quite have a big-picture view of everything customers go through as part of the service experience. Blueprinting provides such insights and may indicate the need for additional research.

And, as Tully suggests, satisfied, happy customers usually deliver stronger profits.

“I clearly think it does contribute to bottom-line performance,” he says.

Blueprinting is not just something for service-oriented businesses.

“Any company can use it because every company, to be honest, tends to be (a) service business when you really think about what they do,” Ostrom says.

A company might not be focused on providing services for external customers, but every company provides internal services.

Developing a comprehensive service blueprint requires collaboration across an entire organization, with input from front-line employees, middle management and senior management.

“This process of bringing people together within the organization that don’t tend to talk to one another normally gives them a picture of what the customer experience is that’s just different than they get through other techniques,” Ostrom says.

Service blueprinting is also flexible and can be modified to address a company’s unique situation. Examples include a business that interfaces exclusively with customers online or one that has to target the needs of different types of customers.

Ostrom has been working with companies on service blueprinting for some time through the Center for Services Leadership. But her first daylong workshop was scheduled in January and future such workshops are in the planning stages.

The full-day format allows Ostrom ample time to offer an overview of the technique and then guide attendees through the modification process.

“We find once people learn the tool and get some exposure to working with it in their own context, that gives them the knowledge they need to go back and start using it more widely within their own organization,” she says.

Steven Lockhard TPI Composites

Steven Lockard – President And CEO, TPI Composites

When the goal is to carve out a spot on the cutting edge of green-energy technology, it helps to be in the business of making blades.

That’s the case with TPI Composites Inc., a privately held company now headquartered in Scottsdale that devotes a significant portion of its business to manufacturing massive wind-turbine blades used by such clients as Mitsubishi Power Systems and GE Energy. TPI Composites, which is also involved in the transportation and military vehicle markets, employs about 2,800 worldwide and operates facilities that house about 1.1 million square feet of manufacturing floor space in the United States, Mexico and China.

“Wind energy is our largest business,” says Steven Lockard, president and CEO. “It’s the business that is expanding at the most rapid pace.”

That expansion, which represents around 80 percent of the company’s annual sales, is indicative of an industry that has experienced unprecedented growth in recent years.

Lockard sees wind energy as a clean, reliable source of electricity and job creation, two areas addressed frequently in recent election campaigns.

“Three or four years ago when we had meetings in Washington, oftentimes we were trying to convince people that wind could become big enough to matter one day,” he says. “And that’s no longer the case.”

It matters now. In 2007, the domestic wind-energy industry expanded its power-generating capacity by 45 percent, installing 5,244 megawatts of wind power, according to the American Wind Energy Association. That accounted for about 30 percent of the nation’s new power-producing capacity and represented $9 billion injected into the economy. Through three quarters of 2008, wind power was on pace to add 7,500 megawatts by year’s end.

And when it comes to job creation, TPI Composites plays a vital role. A newly opened 316,000-square-foot manufacturing plant in Newton, Iowa, is expected to employ about 500 workers when it reaches full capacity. That is a welcomed development in a town hit hard by job losses when its Maytag Corp. plant closed down in 2007.

Although Lockard is optimistic about the long-term prospects for wind energy, he is also realistic about the short term, suggesting the industry may continue to be impacted by the capital crisis through, at least, the first part of 2009. His observations are exclusive to wind energy, an industryenjoying record gains of late, but there may be a warning here for other high-tech businesses dealing with current financial conditions.

“We would expect to see perhaps more modest growth (in 2009) … not the same degree of growth that we’ve been experiencing the last few years,” Lockard says.

www.tpicomposites.com

High-Tech Hopes For Arizona

The State, its universities and business groups work to make Arizona a high-tech powerhouse.

When the new millennium arrived, high-technology activities in Arizona were on a slide. The industry was unable to keep pace with the job demands of an expanding population or match employment growth in other economic sectors. That was then.

The state’s high-tech picture is much brighter now. Semiconductor, aerospace, defense and optics firms continue to be major forces in Arizona’s tech industry. But there’s also a growing presence of companies specializing in biotechnology, information technology, nanotechnology, renewable energy and other areas that fit under the high-tech umbrella.

A roll call of companies with their headquarters or major divisions based in Arizona is an impressive one. That list includes names you should recognize, such as semiconductor powerhouse Amkor Technology, optical-engineering firm Breault Research Organization, On Semiconductor and the highly diversified Avnet Inc. It also includes a high-tech Who’s Who: Raytheon, Intel Corp., Honeywell International, General Dynamics, Boeing, Motorola, W.L. Gore & Associates and IBM among others. And they have been joined by relatively recent arrivals such as Jobing.com, Ensynch Inc., Google, Monster, Amazon.com and PayPal.

“With Boeing, General Dynamics, Honeywell, Intel and Raytheon, you’ve got some big players here,” says Ron Schott, executive director of the nonprofit Arizona Technology Council.

Also, while the bulk of these companies are spread across Maricopa and Pima counties, Arizona Department of Commerce spokesman David Drennon points to significant aerospace, defense and agricultural technology activity in the Yuma area and the growth of bioscience in Flagstaff.

None of this happened by chance. It took, Schott says, a lot of hard work by a lot of different groups and individuals.

“If you set up a positive business climate, these people are very, very intuitive and they’re intelligent,” Schott says. “And if they see things that are happening, people who are trying to make it a positive business state, they recognize that.”

The steps that led to the current high-tech business climate are numerous and varied.

Gov. Janet Napolitano formed the Council on Innovation and Technology in 2003 to generate new development strategies. Later, the Legislature passed such measures as the Angel Investment Tax Credit Program to entice investors, and the “sales factor” tax bill, which led to Intel committing $3 billion in a new Chandler-based 300mm wafer-fabrication facility.

Other important developments include the formation of Science Foundation Arizona and the Translational Genomics Research Institute, or TGen.

Also vital is the role being played by the University of Arizona, Arizona State University and Northern Arizona University. It’s no coincidence Google took up residence on the ASU campus.

Alaina Levine handles corporate relations for the U of A’s College of Science. She also coordinates the Professional Science Master’s Degree Program, a workforce development program that serves Arizona’s high-tech industry.

“Individual business leaders know that if they’re going to start a company here or if they’re going to bring a company here, clearly they need to know that they’re going to be able to staff it with very talented individuals and that there has to be a critical mass of those individuals,” she says. “Otherwise, it’s not worth the investment of moving or starting the company here.”

Arizona Business Magazine Dec-Jan 2008Likewise, those universities need to be widely respected for their academics and research programs. The highly regarded Eller College of Management at U of A and the Biodesign Institute at ASU are just two examples of the level of academic excellence found in the state.

Arizona’s rapid growth translates to a need for even more high-value jobs in the tech sector. And further industry growth will require the availability of vital business resources outside of the dominant population centers.

“It’s a positive, glass half-full scenario here in the state,” Schott says. “That doesn’t mean we don’t have problems, but we’re trying to work and focus on those problems and improve the environment the best we can.”

Web 2.0

Web 2.0 Offers Companies A New Way To Conduct Business

Those unable to offer a clear definition of Web 2.0 are not alone. Even computer industry experts have a hard time agreeing on exactly what it is.

“The reason why there are so many different opinions is because the term is so comprehensive,”says James Windrow, director of interactive strategy for Scottsdale-based I-ology, an Internet strategy firm. “It’s misused so often to include absolutely everything, all new technology that’s been developed for the Internet for about the past four to five years.

“The way I define it, and I use Web 2.0 and social media interchangeably, I define Web 2.0 as just technology that’s used to facilitate communication or collaboration amongst different people.”

David van Toor, general manager and senior vice president for Sage CRM Solutions North America, a business software company with offices in Scottsdale, looks at Web 2.0 technology from a business perspective.

“It’s describing, really, the concept that it’s the way that businesses can derive value from treating the Internet as a technology platform and as a business platform,”he says. “To me, it’s a way of conducting business – a different way of conducting business.”

Although the term implies some major redo of the Internet experience, “in reality, it’s just the next version, it’s the next step, it’s an evolution of the process,”according to Tyler Garns, director of marketing for Infusionsoft, a business software company in Gilbert.

The tools that come under the vast Web 2.0 umbrella have led to online communities and social networking, video sharing, blogging and wikis. If you post a page on MySpace or Facebook, watch and comment on a YouTube video, review a product on Amazon or glean information from Wikipedia, you are taking advantage of Web 2.0 technology.

Some businesses have fully embraced Web 2.0. When General Motors stock took a major dip in October, CEO Rick Wagoner appeared in a short YouTube video to state his company’s case. Cable giant Comcast is effectively using the social networking and micro-blogging site Twitter as an element of its Comcast Cares program. Go to Sage’s Web site for ACT! (www.act.com), its popular contact and customer management software, and you can join discussion forums, access an executive’s blog or suggest a feature for a future product update.

“I don’t need a marketing team to communicate with customers now,” van Toor says. “I can do it directly on the blog. I don’t have to force my customers to go through a service department to reach me.”

That’s part of the big change brought about by Web 2.0. In the past, the Internet experience was pretty much a one-way conversation. There was some modest interactivity, but many companies were satisfied using their Web sites as online brochures. Today, businesses are able to engage customer and employee collaboration as never before. Corporate executives are instantly accessible. Active participation results in lightning-fast dialog and feedback.

Another important point is there is now a type of corporate transparency never available before.

“The way that businesses today are leveraging that is they’re opening up their companies and being fully transparent,”Garns says. “What that allows the customer to do is to have a direct view into the company. And when they see things they like, they then trust the company much, much more.”

Windrow points to a change in the way Web 2.0 impacts a company’s ability to control its brand message. In the past, he says, businesses sought complete control.

“In today’s Web 2.0 world, that’s just not the case,”Windrow says. “Now the brand message has left the control of the company and is firmly with the consumers. They are controlling what’s being said about companies. They’re controlling what information is being shared. And they’re actively seeking ways to punish companies that they feel are socially irresponsible in one way or another, or reward companies that they feel are acting in the best interest of consumers.”

That’s why it’s especially important for businesses to offer consumers direct communication options.

“If you invite them to your business and to your sites, and allow them to communicate there in the way they want to, then you can respond to them in a way you can’t if they do it on other people’s chat rooms or places like Amazon,”van Toor says.

Selling, in particular, has been dramatically impacted by the Internet and Web 2.0 technology. According to Garns, today’s consumers educate themselves. They read reviews, hop into forums and find out what others are saying.

“By the time you go to purchase a product or service, you know exactly what you want and you know the price you want to pay,”he says. “When you walk in the door, you’re ready to negotiate. And so the business that you’re buying from has now been cut out of the sales process.”

Bioscience in Arizona - AZ Business Magazine November 2008

Arizona Is Staking A Claim In Bioscience Territory

There’s no doubt Arizona’s public and private sectors have worked hard this decade to turn the state into a high-profile player in bioscience. And there’s no question these efforts have paid off with a number of successes. But no chart, report or press release drives these points home as effectively as an experience enjoyed by some Arizonans attending the BIO 2008 International Convention held in San Diego last June.

The annual event, staged by the Biotechnology Industry Organization, attracted more than 20,000 industry leaders from 70 countries and 48 states. A sizeable contingent stationed at the Arizona pavilion included, among others, representatives from the Arizona BioIndustry Association, the Department of Commerce, all three major universities, several Arizona cities, private firms, the Flinn Foundation, the Mayo Clinic, Science Foundation Arizona and TGen Drug Development Services, an affiliate of the Translational Genomics Research Institute.

Brad Halvorsen, the Phoenix-based Flinn Foundation’s assistant vice president for communications, is one of the people who noticed a difference this year.

He’s been to the last four BIO conventions and remembers the first time around when people were asking “Arizona does bio?” This year, however, visitors to the Arizona pavilion were inquiring about such specific topics as who at TGen works with proteomics.

This, according to Halvorsen, demonstrates a growing awareness that “Arizona’s not only a bioscience player, but an increasingly substantial one as far as what we’ve been able to do, not only here in-state, but on the national and international level.”

Of course, none of this would be possible without a coordinated effort — one in which the Flinn Foundation plays a major role.

Saundra Johnson, Flinn’s executive vice president, came onboard in 2000, just as the privately endowed foundation was going through an 18-month strategic planning process that culminated in a multimillion-dollar, 10-year commitment to advancing the biosciences in Arizona.

“That was based on a great deal of background work that staff and consultants had done about the tremendous potential at our research institutions,” Johnson says. “And we really believed that … bioscience and life sciences would be a wonderful opportunity for Arizona to build on those core competencies and really leapfrog into a more knowledge-based economy.”

The Flinn Foundation became one of the first and most significant contributors to a statewide effort to help geneticist Jeffrey Trent launch TGen, a nonprofit research institute focused on early disease diagnostics and treatments, and to lure the International Genomics Consortium here. The IGC is a research foundation working to fight cancer and other complex diseases by, in part, “expanding upon the discoveries of the Human Genome Project.” Both organizations have been sharing a Downtown Phoenix building since December 2004.

Maybe more important, the Flinn Foundation commissioned a Cleveland organization, the Battelle Memorial Institute’s Technology Partnership Practice, to conduct a 2002 study that resulted in Arizona’s Bioscience Roadmap. It’s a constantly evolving 10-year blueprint for helping Arizona achieve bioscience success.

Flinn found willing collaborators at all levels of government and in higher education.

“They have been wonderful partners and have embraced the Roadmap,” Johnson says. “Without strong public-private partnerships, you can’t succeed in the kind of work the foundation’s trying to do in terms of actually moving an economy in a direction very quickly.”

Sandra Watson, the Department of Commerce’s work force and business development director, sees several areas where the state has made major contributions to the effort, ranging from increased funding for university research and facilities to tax credits for those making early stage investments for qualified small businesses — especially in the biosciences.

In fact, the department has established the Arizona Innovation Accelerator Program, which combines a variety of grants, tax breaks and tools to help businesses evaluate, develop and commercialize technologies.

“What you’ll find in Arizona is that we are a very collaborative state,” Watson says. “We, along with our partners, have identified key targeted areas and are very focused on developing strategic initiatives around those areas.”

Despite current economic conditions, she is not aware of any plans to cut back current programs. Increased higher-education funding has helped propel the Biodesign Institute at Arizona State University, the BIO5 Institute at the University of Arizona and Northern Arizona University’s Strategic Alliance for Bioscience Research and Education.

The key is that state universities not only help educate a future bioscience work force, they have an active role in the business community. One of BIO5’s main objectives, for example, is to help take research from the labs to the marketplace, and it accomplishes this through material transfer, facility-use agreements and collaborative efforts to create new companies.

“What I hope is that the community knows that if they need something — research expertise, facilities, whatever — that they can start by contacting me or someone in BIO5, and we can help them find what they need to help their business,” says Nina Ossanna, BIO5’s director of business development and vice chair for AZBio, the statewide trade association.

To understand the growing strength of Arizona’s bioscience industry, one needs to understand its diversity. That starts with a short course on terminology. Too many people throw around the term “biotechnology” when they really mean bioscience or life science.

Biotech, according to the Flinn Foundation Web site, www.arizonabiobasics.com, is a subset of bioscience. It is technology based on biology, especially when applied to agriculture, medicine and food science. Many associate it most closely with research and development.

Bioscience, as defined by Battelle, is segmented into five distinct areas: agricultural feedstock and chemicals; medical devices and equipment; drugs and pharmaceuticals; hospitals; and research, testing and medical laboratories.

While some areas around the country are especially strong in biotech, Arizona seems to cover both the gamut and a lot of ground. The so-called Arizona Bio-Corridor stretches from Tucson to Flagstaff. But it would be remiss to leave out areas such as Yuma, where there’s a lot of agricultural work going on.

There’s also a great deal of synergy taking place in different regions. Consider Tucson, where the optics industry is nationally recognized. Local optics expertise is now resulting in microscopic-imaging instruments.

Barry Broome, president and CEO of the Greater Phoenix Economic Council, offers another benefit of bioscience.

“While we work and develop the bioscience sector, we actually make our health-care delivery system better,” Broome says. “And from our standpoint, we actually see it as something that basically creates a kind of economic wellness. So it’s not just about high-level employment.”

Broome points to the example of a diagnostics company that specializes in evaluating therapies for certain brain cancers. Beyond the economic benefit the company brings to the region, it helps physicians and hospitals make better treatment decisions for patients.

While an ample availability of venture capital remains a concern, there are a lot of positives to celebrate.

Three industry developments made their way into a 2008 report Battelle prepared for BIO.

One was the acquisition of Southern Arizona’s Ventana Medical Systems Inc. for more than $3 billion by Roche, the Swiss health care company. Another is the decision by Covance Inc., a respected drug development servicescompany, to build a major research facility in Chandler. And a third is medical-products manufacturer W.L. Gore & Associates Inc.’s decision to expand itsFlagstaff operation and make a move into the Greater Phoenix area.

“It’s really an exciting time to be around and look at the life-sciences industry,” says BIO5’s Ossanna.

For more information about Arizona’s bioscience presence, visit the following links:

azcommerce.com
flinn.org
tgen.org

biodesign.asu.edu
bio5.arizona.edu
arizonabiobasics.com
gpec.org
azbio.org

Arizona Business Magazine November 2008

CyberShoppers

Attention Cyber Shoppers: Do Your Homework Before Entering The E-commerce Arena

Here’s advice for any business giving serious consideration to selling goods and services online: Before diving into electronic commerce, make sure to get your feet wet in such critical areas as marketing, networking, branding, fulfillment and customer service.

Novices can hone these skills by selling on eBay or placing products on Amazon Marketplace. But even well-established businesses must realize that an online presence involves venturing into such new territories as the blogosphere and social media.

None of this is any reason to shy away. The upside is too great. In March, Walt Disney Co. CEO Robert Iger said his company is on track to generate $1 billion in online revenue this year. Those expectations are too lofty for most, but consider recent figures from the U.S. Census Bureau: Total e-commerce sales for 2007 reached about $136.4 billion, a 19 percent increase from the year before.

Amanda Vega is a former AOL employee who now operates Amanda Vega Consulting, an integrated marketing firm currently headquartered in Phoenix. A big part of her business is Web site development and related services. She sees e-commerce as a viable option for two kinds of entrepreneurs.

“People should consider it if they think that there’s a place in the market that isn’t being serviced by someone else or isn’t being serviced adequately,” she says. “Or (it offers) a natural extension to their brick-and-mortar store to help give them a national or international presence instead of just going the traditional route and building store No. 2 and store No. 3, which can cost a lot more than doing it online.”

The nice part about operating an effective e-commerce Web site is there are more ways to make money than just selling your own products or services. One method, according to Vega, is through affiliate deals with complementary companies.

“Even if it’s, let’s say, $300 a month that you’re making somehow behind the scenes for referring to other products or vendors, it’s still more income than the business owner had coming in through the traditional door,” she says.

Mark Sharkey, the owner of Mesa-based PrecisionPros.com Network and such related companies as DynamicPros.com, which provides Web programming services, says there are a variety of opportunities for those with content-rich sites that generate frequent repeat visits.

“If there’s a reason for people to keep coming back all the time,” Sharkey says, “then those types of sites will easily generate money from selling banner advertisements or doing a link-exchange kind of setup where they get paid based on the number of people that see an advertisement on the Web site, click through and go to another Web site.

“The great thing about an e-commerce Web site is that it can make money for you 24 hours a day,” he continues. “You don’t have to be in your office for it to make money for you. You don’t have to restrict your business to the local market. You have a worldwide market that’s available to you now.”

Deciding whether to enter the e-commerce arena won’t be your biggest decision. Deciding how to go about it the right way will be. More times than not, this means involving people like Vega or Sharkey to help with such things as research, development, design and marketing.

There are many crucial elements that contribute to a successful site, and not just from a visual standpoint.

Create a user-friendly site that enhances the customer’s shopping experience. Provide good information and make it easy to navigate. Make sure the customer feels safe when placing an order and providing personal information.

“The Internet is an open forum and if we don’t encrypt that data, it’s easy to see and steal that information,” Sharkey says. “You want to make sure the Web site itself is set up or the Web server is set up to handle secure transactions.”

There’s also the issue of real-time credit card processing. If you go this route, make sure you have a reputable company processing transactions.

You need to be on a server with a fast response time or risk losing impatient visitors. And don’t forget product availability and production times. This is not the old mail-order business. No one’s willing to wait six to eight weeks. Customers expect prompt delivery. If you promise to ship within 24 hours, Vega says, customers start counting from the time of purchase, not from the time you arrive at your office the next day.

“Those are the questions that I think people don’t think about,” she says. It may be less expensive to operate an online business than a brick-and-mortar store, “but there are extra costs associated with the fact that now your business is 24/7.”

Vega points out that if you mess up, online shoppers can quickly spread the word through blogs, forums, message boards and other social-media means.

Also, there are numerous marketing considerations, some costly and others that require hard work and smart decisions. This includes optimizing your Web site for search engines through the proper use of keywords and by generating inbound links from relevant sites. It may mean creating a blog and establishing yourself as an industry expert to help drive customers to your site. You might experiment with online advertising in some of its various forms. There’s also traditional advertising and public relations.

As Vega says, “You can’t just throw the store online and say, ‘OK, go.’ ”

Bad business partners

What To Do When Bad Business Partners Happen To Good People

“He is robbing you blind.” Business owners are never emotionally prepared to hear these five words, but they should be poised for action to protect their own interests and those of their companies’ when business relationships turn hostile.

Recently in Arizona, the owner of a residential property rental company found this out the hard way when she was told by a former employee that the manager of her company’s 150 properties was stealing from the company. A widow nearing retirement, she had made a series of business mistakes, including giving the manager stock in the company without proper legal documentation, as both a reward for past service and to motivate and compensate him for future work. The once loyal employee began to take control of the owner’s $25 million investment under the guise of “handling the details” of the business. He took control of the accounting software program, the company credit cards and kept details from the owner by misinforming her of the time for meetings with the company accountant. She was dumbstruck when she received the phone call from the former employee, but, on reflection, it all made sense. Her business acumen for finding deals on distressed properties and turning them into rentals had not prepared her for the complexities of dealing with a business divorce. As a business owner you need to protect yourself. The following provides some tips you should keep in mind if you believe a business divorce is imminent.

Gain Control
When there is a shift in the business relationship, as owner your first step should be to get back your position of power. You will need to separate yourself immediately from the person causing the conflict in your business. In this case, the property owner fired the manager, changed the locks on the doors, cancelled credit cards and changed passwords to all the computer systems. You will need to take this even further to protect your intellectual property and files. Talk to your IT and file room staff about securing access and tracking of information and control of passwords.

If you are fortunate enough to have your company running well today, this is the perfect time to make sure confidentiality policies are in place and have a lawyer review your company documents. It makes more sense to manage risk and resolve conflicts before they start to touch your bottom line.

Stop Talking
It is tempting to unload your frustrations on your accountant, your tax advisor, other employees and even your next door neighbor. But the truth is those comments could come back to cost you money, leverage and possibly your business reputation. While there are some exceptions, as a general rule, conversations you have with someone, other than your lawyer, can be used in court. Make your attorney your sounding board, confidant, champion and warrior. What you tell your attorney is protected by attorney-client privilege. It is the bedrock of your right to have effective counsel; without it, lawyers could not effectively represent their clients.

Keep Original Documents
This property owner had a bad habit of giving away original documents. When it came time to organize her case, this made the task even more challenging for attorneys, expert witnesses and even business advisers. Making a copy of a document is fine, but make sure you keep the original. Be sure to maintain the integrity of original documents by keeping them free of extraneous handwritten notes. If you write on these documents, you may make your case more difficult. If you want to make a note about a business matter, grab a Post It note.

Hire a Lawyer
You may know your business, but your expertise is in the company, not the law. A good lawyer needs to be the captain of your ship as you navigate a business divorce. Your lawyer may recommend a business adviser to get your company back on track. While this is a “divorce” of sorts, it isn’t the job for a family law attorney; you need an experienced business attorney who has dealt with breakups in the business arena. Get referrals through people you know in the business community, professional organizations or your local bar association. Do not be afraid to ask a lawyer if he/she has ever done this type of work. In some cases, a team of lawyers may be necessary. You may need experience in several different areas to get the matter resolved.

Turning the Tide
How did the widowed property owner fare with her business on shaky ground and her future retirement threatened? Through a mediation process, she was able to regain control of her company and tocarve her co-owner out of the business. The woman is now back in a take-charge position, buying and managing properties. Most importantly, her future is in a more secure place.

Like a marital divorce, a business divorce is never easy but, once resolved, you’ll be able to run the company instead of letting bad employees or unsuitable business partners run you.

Leon Silver and Dan Garrison are shareholders at the law firm of Shughart Thomson & Kilroy. They lead the firm’s Business Divorce team. They can be reached at 602-650-2000.

There's more to building an Internet presence than just posting a Web site, 2008

There’s more to building an Internet presence than just posting a Web site

Working the Web

There’s more to building an Internet presence than just posting a Web site

By Don Weiner

When it comes to establishing a presence on the Web, there seem to be as many good reasons as there are sites. The Web offers groups effective ways to communicate their messages.

Politicians and organizations may see it as a fundraising tool. Some are interested in creating opportunities for visitors to socialize or speak their minds. And businesses use it to generate leads, answer frequently asked questions, provide operating manuals and promote products.

The reasons may be varied, but the building blocks of an easy-to-find, well-designed Web site are not.

Miki Dzugan, president and principal consultant of Sedona-based Rapport Online Inc., argues that “the effective Web site starts with the concept of, ‘What do you want to accomplish?’ ”

Once you establish your goals, consider who you want to reach and how you plan to promote your site.

“I can’t think of an instance that it doesn’t include search-engine marketing,” she says. “To me, that’s just basic to being on the Web.”

Outlining a marketing strategy at the outset sets the table for building and designing the site properly. It helps target the most useful keywords, link strategies and tagging needed to make your site search-engine friendly.

Why is this important?

“We find, and the statistics prove it, that right now, regardless of your product or service, someone is searching for you,” says Andy Richter, managing partner and vice president of sales and marketing for Terralever, an interactive marketing agency in Tempe.

Once you decide how to lure visitors, the next step is to hook them. There’s no better way than by creating an attractive, user-friendly site.

“The key element is to have something useful on the Web site for your client,” Dzugan says. “Information is really, still, the primary thing that is sought on the Internet. And so people need to be able to get their information quickly. Web site users are very impatient. Don’t be too subtle. … On the Web, you’ve got just about one second for people to decide whether they’re going to do anything more with your Web site.”

Well-written, up-to-date content helps. So do interactive and visual elements. But there has to be a balance between the written word and Flash-based video or animation.

“There are some excellent, powerful uses for Flash,” Dzugan says, “but the thing that you have to bear in mind is that search engines don’t understand that. So you need to have text on your Web site.”

Considering all this, pitches from providers who say you can get a site up and running for less than $20 a month don’t ring true for everyone.

Although such solutions may work for some, Richter likes to borrow a quote from billionaire businessman and investor Warren Buffett: “Price is what you pay. Value is what you get.”

In fact, a one-person online operation may not be the best choice either. Web site design and marketing requires the skill sets of designers, information architects, copywriters and search-engine-optimization specialists, among others.

“Typically, you’re not going to find a well-rounded person that’s great at all those things,” Richter says. “It really takes some level of specificity in all those areas to really put a site out there that’s going to really communicate your unique value proposition to your customers.”

If you decide on getting professional help, you can expect to spend a minimum of four figures. Also, let the experts do their job. Don’t bog them down with an overabundance of your own design ideas.

“The toughest conversation that I have to have with clients,” Richter says, “is to tell them, ‘This is not about you or for you. This is for your customers.’ ”

Professional Web developers are up to date on the latest, most successful trends. For example, Richter points to social media as an area growing in importance.

“When the Internet came to prominence, it was very much a one-way conversation. It was the print and marketing collateral digitized,” he says. “So just from a general communications standpoint, the trend is really around dialogue. It’s really around conversation and not just communicating how great your company is.”

Be aware that nothing ends once the Web site appears on the Internet.

“Launching a site is a singular tactic to an overall marketing strategy,” Richter says. “If you’re truly going to get the return on investment, you can’t just look at launching the site as the panacea to your online marketing needs.”

cover July 2008

There has to be an ongoing effort to measure and analyze a site’s performance, market it, manage its content and improve it.

One of the biggest mistakes firms make, and this includes some major companies, is to allow a Web site to remain idle.

“If it sits for three months, people will see that it’s stagnant and it gives them no reason to come back,”Richter says.

When a company’s product line generates news, its Web site needs to be the prime source for additional information.

“Some large companies that aren’t doing direct selling online kind of lose track of the fact that they need to make sure that their new products are up there,” Dzugan says.

www.roi-web.com
www.terralever.com

 

AZ Business Magazine July 2008 |
Translatinal Accelerator looks to invest in Arizona bioscience companies, 2008

Translatinal Accelerator looks to invest in Arizona bioscience companies

Future Funding

Translational Accelerator looks to invest in Arizona bioscience companies

By Don Weiner

Providing funds is one thing. Lending a hand may mean something else. But select companies can expect both from the Translational Accelerator LLC, a new $20 million Arizona-based venture capital group that has set its sights on assisting early-stage bioscience companies already located in the state or planning to move here.

“We will make an investment, we will keep what we call ‘dry powder’ to enable us to do follow-on investments with that same company a

nd we are committed to the companies that we invest in to assist them from a management perspective as well,” says Eric Tooker, president and CEO of MCS Biotech Resources in Scottsdale and one of four managers for the TRAC fund. “We want to be active managers because of our expertise.”
And the combined experience of the four TRAC managers is, to say the least, ample. Tooker is a well-respected businessman and legal counsel. Richard Love is a former chief operating officer for the Translational Genomics Research Institute, who has extensive experience running biotechnology and drug-development companies. Dr. Daniel Von Hoff is TGen’s physician in chief, director and senior investigator for TGen’s Clinical Translational Research Division, and a clinical professor of medicine at the University of Arizona. John Bentley is a founding partner of Grayhawk Venture Partners in Phoenix and a venture industry veteran.

TRAC is targeting companies involved in cancer and neuroscience diagnostics, services, prevention and treatment. There’s enough funding available, according to Tooker, to initially assist about six or seven companies with investments ranging from $500,000 to $1.5 million. The idea is to help these firms during their pre-clinical or early clinical stages.

There may be some flexibility in terms of which stage of development a company has reached, but there’s none in terms of where the company is located.

Love points out that Arizona has done a good job supporting bioscience research at institutions such as TGen and at state universities.

“It’s clear that funding has led to discoveries and those discoveries can be commercialized,” Love says. “But if you don’t have local venture capital here, particularly for the early-stage discoveries, the discoveries will be taken out of state and go to San Diego or San Francisco or elsewhere.

“So it’s real clear we had a big need for local venture capital here. … That’s what stimulated all of us to do this.”

Tooker agrees and adds: “The idea for TRAC really was born out of a desire to keep those companies here and raise a fund that was Arizona-only, biotech-only to help the biotech infrastructure here.”

The first business to receive TRAC funding is Silamed Inc., a Scottsdale biopharmaceutical company that is developing ways to enhance new or existing drugs through the use of silicon. It is also an example of a company that has received more than a check from TRAC. Both Love and Von Hoff serve as Silamed advisors.

Silamed CEO Craig Taylor and Stephen Gately, the company’s founder and chief scientific officer, have come to rely on Von Hoff for his expertise in oncology therapeutics and on Love for his business acumen. Their counsel, according to Taylor, has been invaluable.

“They’re really trying to take us by the hand here a bit and help us along,” Taylor says. “And while I have experience doing this on the investment side, having people in there with us is very valuable.”

Other venture-capital firms looking at Silamed often seek Love’s input on the investment opportunity and Von Hoff’s thoughts on the company’s technology.

“Those are perspectives that they provide to would-be investors that, because of their position (and) because of their experience, is very valuable to us,” Taylor says.

There are several priorities TRAC managers consider when evaluating potential investments. One is strong management.

“Many times, especially in drug development, the technology can always be improved but management talent is something that is either there or is not there,” Tooker says.

A novel and promising technology is a second criterion. And, finally, TRAC managers want to know there is a market for a company’s technology, one that warrants an investment and indicates the potential for profit.

“We’re looking at probably a four- to six-year time horizon from the time we invest to the time that there’s an exit,” Tooker says. “Our preferred exit strategy and our likely exit strategy will be a purchase of the companies that we invest in by big pharma or even, really, medium-sized pharma.”

When that happens, the return can be substantial.July Cover 2008

“Our expectation is that, yeah, there will be ‘gold in them thar hills,’ ” Love says. “From what we’ve seen, I think there’s a good probability of that.

“I think it’s very important for our fund to make money for investors because part of the problem in Arizona is that high net worth people who invest in this industry have no experience investing in it. So it’s important that those who are investing have a good experience and they’ll bring more in. That’s how venture capital in biotech in the Bay Area, for example, took off.”

www.silamed.com

AZ Business Magazine July 2008 |
small business open sign - AZ Business Magazine April 2008

Small Business Is Big Business In Arizona

There’s really no need for small business owners to feel like they have to go it alone in Arizona, not with the variety of programs, organizations and resources available to provide help.

There are obvious places to start. The Arizona Department of Commerce has an online resource center that is filled with links and information. Be sure to download the free resource guide. Also, go to the U.S. Small Business Administration’s Arizona District Office Web site to find out about the many resources, services and tools available there.

The Arizona Small Business Association is an organization that serves as an advocate for small businesses and is dedicated to helping them grow. There is a modest $125 annual membership fee that provides access to various services, networking opportunities and value-added programs such as a group health care plan. A worker’s compensation program, in association with SCF Arizona, may lead to bonus dividends based on the safety success of association members.

“Small business is big business in Arizona and small businesses need to understand how to partner, how to connect, how to access resources in a cooperative mode,” says Joan Koerber-Walker, ASBA’s chief executive officer. “And that’s what ASBA gives them.”

The SCORE Association is well-represented in Arizona with chapters across the state. Successful retired executives and business owners provide free one-on-one counseling and stage low-cost seminars that deal with virtually all issues, including raising capital. In fact, according to Chet Ross, chairman of SCORE’s Phoenix chapter, a team of counselors will actually visit a client’s place of business.

Another place to turn for answers is the Arizona Small Business Development Center Network, a partnership between community college districts and the SBA. The AZSBDC offers free business counseling, workshops, programs, and help with technology development and commercialization.

These resources are in place to help businesses of all types, so take advantage of their offerings throughout the start-up process and beyond.

For more information visit the following websites:

sba.gov/localresources/district/az
asba.com
azsbdc.net

options grow for telecommunication providers - AZ Business Magazine April 2008

Options For Telecommunications Providers Steadily Growing

Choosing the right telecommunications system for a growing business is no small decision. In fact, the array of available products and services can be a bit overwhelming. But, in the end, everyone seems to want the same thing.

“One of the things that we’ve found through the surveys that we’ve done is that reliability is key,” says Mark Geiselmayr, senior vice president for Integra Telecom of Arizona.

“Obviously, once telecommunications have been evaluated and selected and implemented, as a business owner you don’t want to have to deal with it anymore. You expect it to be there and you expect it to work, and you don’t want to have to deal with any issues or problems surrounding the service.”

Reaching that endpoint starts with picking a telecommunications provider. That requires several important considerations, according to Jason Cate, director of Arizona midmarket sales for the competitive local exchange carrier formerly known as McLeodUSA, which was recently acquired by PAETEC Holding Corp.

“A big thing when you’re looking for a provider is you want to look at their customer service,” Cate says. “Can they deliver a personalized solution for your business needs? Can they do all of your locations and tie everything together for you? Do they provide, and have for a long period of time provided, the products that work?”

The telecommunications umbrella covers everything from basic business lines and calling features to Internet and data services. One of the biggest changes in the industry is the move away from traditional private branch exchange, or PBX, telephone systems to Voice over Internet Protocol systems. Whereas separate networks were required for voice and data communications with the older approach, the IP PBX converges voice and data networks on a single T1 line.

This results in the availability of a lot more features, says Clark Peterson, chief executive officer of Scottsdale-based Telesphere.

It’s possible, he says, to have voice mail show up in an e-mail account with a WAV audio file attached. Faxes can come directly into e-mail accounts, eliminating any need for a fax machine. Office phones and cell phones can ring simultaneously. Connectivity between multiple offices becomes a reality with four-digit dialing linking the various locations and just one receptionist monitoring calls from a single site.

One of Telesphere’s specialties is providing VoIP over a private dedicated connection rather than a public Internet connection. Also, it eliminates the need for an on-site PBX system at a client’s place of business. All voice and data services are hosted in secure data centers.

“You have small to medium businesses now seeing that they can have all the robust feature functionality of the Fortune 500 companies,” Peterson says. “And really, they’re getting the feature functionality of an $80,000 to $100,000 PBX system that they would have had to buy themselves to do everything that this full-on hosted service does.”

Integra Telecom, one of the largest telecommunications providers in the West, has been in Arizona since acquiring Electric Lightwave Inc. in 2006. The company, which has a fully staffed local presence in each of its markets, takes a long-term approach with clients.

“We’ve got some really nice options in terms of purchasing systems that if you outgrow them, you can return them, and then we will provide you with the next level of capacity without having lost the original investment,” Geiselmayr says. “So there are all kinds of neat programs there to help a business that’s really growing much faster than their ability to predict what they want to invest in a system until they get to that level of need.”

Small- and medium-sized businesses that have multiple locations with telecommunications hardware in place may want to take a look at securing services from a company like PAETEC.
“Most of our focus now is on circuit-based IP products because that’s really the way to take the midmarket sector and increase profitability and productivity for midmarket companies,” Cate says.

He sees his company as a one-stop shop with local and long-distance telephone service, site-to-site data networking, and dedicated Internet service among its varied offerings.

“We can tie nationwide companies together and do everything in all of the markets,” he says.
One of its more popular products is something called Dynamic Integrated Access. It combines a variety of attractive options such as rerouting inbound calls from one business location to another without long-distance charges, and speed dialing between various offices.

The bottom line is Arizona is a very competitive market for telecom services.
“We’ve seen a lot of consolidation recently, so the number of competitors has dropped,” Geiselmayr says. “But there are solid providers here and they all have their unique approach to the marketplace.”

For more information on the telecommunications providers mentioned, visit the following websites:

integratelecom.com
paetec.com
telesphere.com

Baby Boomer Bust

Baby Boomers Bust

Companies get ready as boomers start leaving the work force

The catchy term many are using to describe the impending exodus of baby boomers from the work force sounds like the title of a science-fiction film: “The Brain Drain.

But there’s nothing fictional about it. The oldest baby boomers, a group that includes more than 78 million Americans born between 1946 and 1964, began qualifying for early Social Security benefits this year. Some may choose to work beyond the traditional retirement age and others could stay on for financial reasons, but the eventual departure of baby boomers will have a serious impact on corporate America.
This might be a particular concern in upper-management ranks, where positions are most likely manned by older, more experienced personnel and a talent pool of capable replacements is thin.

“The issue is simply that our population is getting older and the birth rates aren’t equal to the aging of the population,” says Angelo Kinicki, an Arizona State University management professor, author and consultant. “You’re going to have more people exiting than you will have entering (the work force).”

Despite this demographic shift, recent surveys from Ernst & Young and Monster Worldwide agree that few corporations are properly prepared for the challenges ahead.

“What’s going to happen here is as baby boomers retire, you’re going to have a lot of people who have knowledge that are leaving the work force,” Kinicki adds.

Kinicki says it’s vital to create systems for transferring knowledge from seasoned employees and senior executives down to lower levels through the organization.
“I’d say the more progressive companies are engaging in what we call knowledge-management programs,” Kinicki says.

But, according to a 2007 Monster study titled “Building and Securing an Organizational Brain Trust in an Age of Brain Drain,” few companies have taken such steps.

While trying to determine the level of awareness companies have of the coming brain drain and what they’re doing to prepare for it, Monster found that only 20 percent of firms had a formal strategy in place to manage and preserve organizational knowledge.

Monster concludes that “the absence of such planning leaves a valuable asset exposed to a competitive market. Firms must not only recognize the value of knowledge but actively manage and protect it.”

Kinicki says several companies in Arizona, such as Intel, APS and Honeywell, have taken a proactive approach.

One corporation that has been especially innovative is Avnet Inc., a Phoenix-based Fortune 500 company that is one of the world’s largest distributors of electronic components, computer products and technology services.

Lynn Monkelien, vice president of learning and development, says Avnet is very cognizant of the imminent retirement of baby boomers.

“(We) have started looking at all kinds of ways that we can start to manage this transition period,” she says.

Among those is a multiple-tiered program that uses top-level management to teach classes for those viewed as future leaders.

Consider the Global Organizational Leadership Development, or GOLD, program. It does more than just cover particular subjects. Managers are able to expose students to their own experiences, while studentsget a chance to build relationships with senior leaders, paving the way for future coaching and mentoring.

“I think the real benefit is going to come as we start to replace some of the oldguard with the new guard,” Monkelien says.

The company also places great importance on succession planning, according to Linda Biddle, Avnet’s vice president for talent development. Avnet’s goal is to create a steady flow of people at all levels of the organization ready to take on new roles.

“Avnet is always thinking ahead, trying to predict what things are going to impact our business from a technology standpoint, from a process standpoint and, also, from a people standpoint,” Biddle says. “What we’re trying to do is not be reactionary — we’re trying to be proactive.”

Arizona Business Magazine February 2008