Lessons for Leaders: The accidental art dealer featuring Bill Kieger with Art Force written July 2014 by John P. Palen for Minnesota Business Magazine

Posted By John P. Palen, CEO & Founder of Allied Executives

How both personal and business experiences can lead to successful endeavors

Bill Kieger knows how to manage money and people, but a corporate art program? Well, he figured that out, too.

Kieger is the CEO of Art Force, a subsidiary of General Finance & Development (GFD), both based in Minneapolis. If you ask him, he might say his foray into the art business happened quite by accident.

Kieger spent the bulk of his early career at American Express Financial Advisors, now Ameriprise, where he ran his own division overseeing 12 offices, 200 financial advisors and more than $4 billion in financial assets.

The time came, however, when he decided he wanted more time and freedom and decided to leave to run his own company. He departed Ameriprise on good terms and took over GFD, a micro-cap holding company then involved in developing medical technologies. Shortly after Kieger sold one of GFD's companies, a business broker brought a struggling corporate art consulting business to his attention.

"I did not know or want to be in the art business," he recalls.

But sometimes life is all about timing and experiences. At Ameriprise, Kieger had purchased art for their offices from the same company the broker was presenting to him, so he was familiar with the business.

"When I left Ameriprise, I sold the art I bought for the office and I made money on it," he says. "I eventually started looking at art as an asset."

In 2009, GFD (listed as GFDV on the OTC Markets) purchased the assets of the aforementioned art consultancy, and formed Corporate Art Force, rebranded to Art Force in 2014.

Kieger knew he had to do things differently in order to be successful. So his first step was relocating the company to where the Twin Cities artists congregate: the Northeast Minneapolis Arts District.

His next move? Focusing on how to go to market. "We knew we had a business model that was not profitable and not working."

Art Force revamped the entire business model by introducing new roles and processes to improve their efficiencies and to better position themselves in the market.

For instance, he created a professional development and certification program for the art consultants, who previously had no formalized training or structured consulting process. Then, he created a sales and marketing department focused on market intelligence, marketing campaigns, lead generation, and business development. This freed the art consultants to focus more on what they do best – managing projects and working with clients to customize art to best reflect their culture and brand. After all, it doesn't make sense for a hospital to have art on the walls that does not consider the patient experience and outcomes.

"This intrinsic value of art cannot be overlooked," said Kieger.

But perhaps the biggest change they implemented was an "art as a service" model. In the past, the company sold the art outright to the end-user, which limited the company's growth potential. So Kieger and his team revamped their entire pricing model and initiated the "Smart Art Program," which is a recurring program for both the customer and for Art Force.

For a monthly fee, customers get original artwork that can be rotated out every six months. That means new art on the walls twice a year. The program provides Art Force with recurring revenues from each client. And let's not forget about the artists supported and promoted by Art Force.

What's more, Art Force invested in a web-based platform that has improved the company's ordering and fulfillment process, as well as their efficiencies. "This program simplifies the business for our customers, community of artists and our new business model," says Kieger. "It's a win-win-win."

And, while it took four years to develop and implement, the new business model seems to be working. From its humble origins in Minnesota, Art Force's now projects having art installations in 40 states in 2014.

Tips

1. Sometimes experiences from your personal life can apply to new ways to run your company.
2. Borrow processes from other industries and apply them to yours, if applicable.
3. Saying "No" at first can often open up reasons to say "Yes" later.
4. Looking for the "everybody wins" strategies often results in everybody winning.

Ripe for Change featuring Dale Klein with Parallel Technologies, Inc. written June 2014 by John P. Palen for Minnesota Business Magazine

Posted By John P. Palen, CEO & Founder of Allied Executives
They say the early bird catches the worm. In the case of innovation, sometimes the worm puts up a fight.
Markets aren't always ready for a new product or process just because it's better. Entrepreneurs may spend millions on research and development, but they must also prepare for loyalty to inefficiency, a learning curve among decision makers and slow market adoption.
Dale Klein had a vision in 2005 to develop a company that unified technology infrastructures for both facilities management and information technology. He sold a system software integration firm in 2004 and was in the market to acquire an IT managed services business. He purchased Parallel Technologies, a struggling cabling installer. The company had been around since 1983 and had a few data center customers for new construction and upgrades, but it needed a turnaround.
As the company's new CEO, Klein had to assess the current talent and ended up reducing the workforce in order to hire talent beyond cabling installations. He had to improve the cash flow by cleaning up slow-to-pay customers and collecting long outstanding receivables, some more than a year old. He also focused on building a sales team and internal processes and controls to help the business run more efficiently.
Still, for about three years the company continued to serve cabling customers, building revenues from $5 million to about $21 million. Then in 2008, construction took a dive with the recession and only bottom-dollar firms were winning the new projects. "We were priced for quality and expertise," Klein said. "Our new projects dried up."
The timing was finally right. Parallel Technologies shifted focus to infrastructure solutions and data center consulting. By improving cash flow and efficiencies while recruiting stronger IT engineering talent early on, Klein had the foundational people and processes in place to take new solutions to market. He made a conscious decision to halt bottom-line growth in the interests of shifting the business model to support his original vision.
Today, Parallel Technologies attributes 65 percent of its business to designing and building infrastructure solutions, such as data centers and just 35 percent to field services and installation. The company is recognized as one of the fastest growing private businesses in the Twin Cities. Klein is still waiting to unroll the rest of his vision, which is to help his clients use the data across the enterprise infrastructure they’ve collected to support more timely and smarter business decisions. The company's new building is a physical tour of what customers can do with smart technologies and infrastructure.
"I grossly underestimated how long it would take to reach this stage, but we are now there," he said.
The moral of this company success story is to have a vision, certainly, but make sure you're prepared financially and strategically to ride out the lean times until the market catches up to your big ideas.
Tips for Timing Innovation to Market Demand

1. Identify unmet customer needs that you can deliver better than competitors.
2. Set your vision, prove the sales model and hire the talent you'll need to deliver it well.
3. Keep your bread and butter work as you transition to new products or services.
4. Bankroll your transition with good cash flow and efficient processes.
5. Retain customers by educating and upselling on your vision to match their goals.

Lessons for Leaders: Putting on a clinic featuring Gary Meyers with Massage Envy & The Joint written April 2014 by John P. Palen for Minnesota Business Magazine

Posted By John P. Palen, CEO & Founder of Allied Executives

Franchises have long been the business model of choice for entrepreneurs who don't want to reinvent the wheel — or make a new wheel — but invest in a proven product or service for faster profits.

What happens, though, when an industry not normally modeled as a franchise is introduced to the franchise concept? Launched well, it can expand opportunities for the entrepreneur as well as the people directly serving customers.

Back in 2005, Gary Meyers embarked on a new twist of the franchise business model. After nearly two decades of frustration as the owner of Newport Collision Center in Newport, Minn. – brought on by a lack of control over margins because of insurance companies - he sold his business. For his next venture, he was interested in franchises for the turnkey approach, but didn't realize his ultimate franchise choice would support new industries that provided more full-time employment in Minnesota as well as growing revenue streams.

It started with Massage Envy. Because of Meyers, the Arizona-based franchisor now has 26 clinics in the region, becoming the largest employer of massage therapists in the state, with over 500 employed at this time. As the regional developer for the franchise, Meyers owns three of the clinics and assists franchisees in developing clinics in his territories including North Dakota, South Dakota and western Wisconsin. Customers purchase a monthly membership at the clinics and receive one massage a month at their convenience. In turn, each clinic can employ more full-time massage therapists than a traditional spa based on the sheer membership volume.

Growth hasn't been without challenges. Each store has 45 to 50 employees with average revenue per store of $1.3 million. Not only is this an operational challenge, but the store also needs to have enough therapists on hand to make the service convenient. Meyers had to build collaborations with 14 area colleges that offer massage therapy degrees to fill positions in existing and new stores. He also had the challenge of continuing education offerings to ensure therapists can retain their licenses and managing staff are efficient and professional.

And here's the twist. Meyers recently embarked on a new franchise venture, The Joint, to create chiropractic services in the same business model. "I saw the chiropractic industry the same as massage therapy. There are more chiropractors than can find jobs. The Joint business model will give them jobs, allow them to practice their trade, and make the business side of it easier. Again, customers will pay a monthly membership fee and receive chiropractic care based on their type of membership."

By locating the chiropractic practice near a Massage Envy clinic, Meyers creates operational efficiencies, too. "We've created new industries," he says. "As clinics scale their memberships, it provides a re-occurring revenue stream to cover expenses — and the rest is profit."

It's a vision that ties to contracts for up to 34 Massage Envy clinics and five The Joint clinics by 2015. Meyers Enterprises still relies on the turnkey franchise approach, but the market effect is great jobs for therapists, chiropractors and the entrepreneurs who invest in these franchises. Meyers' projected revenues for the three owned Massage Envy clinics and two The Joint clinics is $6 million in 2014.

If it becomes a business model worthy of envy, it can only help improve the state's — and country's — increasingly service-based economy.

Tips for Scaling Professional Business Models for Profit

1. Look for a service industry that appears commoditized.
2. Tie consumer membership arrangements to the service.
3. Provide inviting facilities for multiple professionals to serve members.
4. Follow a formula of memberships plus visits/month to equal overhead plus profit margin.

Lessons for Leaders: Banking on service featuring Arleen Sullivan and Carl Jones with Anchor Bank written February 2014 by John P. Palen for Minnesota Business Magazine

Posted By John P. Palen, CEO & Founder of Allied Executives

It's no secret that the banking industry overall has received bad marks in customer service and loyalty over the past 10 years. With public perception low on banking, it takes a fresh perspective in leadership to inspire customers to see one bank as different from another - better than another. It takes more than one individual sticking to principles and promises.

The executive leadership team at Anchor Bank embraced this truth by energizing core values established 30 years ago. The recession taught them to leave the corporatized branch mindset behind and make all levels of the bank approachable and accessible again. Training across their 15 Twin Cities area locations and a renewed approach to serving customers beyond the typical one-to-one banker relationship have supported stronger assets and sales.

"We call it 4Deep," explains Arleen Sullivan, who has served at the bank since 2003 and is now Market President, Business Banking East, serving the East Metro hub offices. "We want to ensure that a team of people within Anchor are assigned to each of our business customers. When we know our customers, we serve them better."

The team generally includes someone from Anchor Bank's leadership team, a relationship manager, and an expert in services such as cash management and credit. The goal is to ensure the customer forms strong working relationships with the right experts. For example, if a business owner has a question about succession planning or acquisitions, they have direct access to the right expertise, including CEO Carl Jones.

"We want to move as fast as a small business when decisions need to be made," explains Sullivan. Being flexible and nimble suits this bank, founded in the 1960s by entrepreneur Winton Jones, who grew it mainly through acquisitions in its early years (in the past 15 years, it's grown organically). His son, Carl Jones, now CEO, joined the bank in 1992 after pursuing a career in science and biomedical technology. Today, Anchor Bank is the seventh-largest bank in Minnesota.

Approachable executives are part of the Anchor Bank core value system, with key leaders meeting with customers on a regular basis. "Being in banking is a great way to give back to a community," notes Jones, who recalls his father always making customers his first priority and being involved in their business strategy and problem-solving. Through the bank's foundation, 5 percent of profits also go back to the communities in the form of scholarships, charitable, donations, and community development efforts.

Internally, Jones is the representative of the Jones family, supporting long-term customer relationships, seeking bank acquisition opportunities, and supporting the leadership team. That team has transformed in recent years from individual branch oversight to a larger focus and responsibility for the bank's role across the Twin Cities.

A metro focus rather than branch focus means that Sullivan and others have the access and support of the entire Twin Cities leadership, making the 4Deep program internal as well as external to operations. "Our prospective customers and employees tell us it's the active participation of our executives in our customer relationships that differentiates Anchor Bank from its competitors," she says.

Time will tell if the 4Deep program, launched in January 2012, can mend the fences of banking's past and play out in continued growth and loyalty for Anchor Bank, its customer base, and employees. But bank leaders who step out of their offices and back into deeper customer relationships can go far toward bank loyalty and a competitive reputation.

Tips for Deep Customer Service

1. Make sure that customers have strong relationships with more than one person, with defined roles that add actual value to the relationship.
2. Provide regular access to decision makers to strengthen the bond.
3. Introduce multiple services to enhance a customer's sense of value and loyalty.
4. Operate like a united company rather than a group of individuals or separate business unit.

Lessons for Leaders: Taking Ownership featuring Jim Gilliam with Montu Staffing Solutions written January 2014 by John P. Palen for Minnesota Business Magazine

Posted By John P. Palen, CEO & Founder of Allied Executives

After years of rising through the ranks of a large corporation, an ambitious executive will eventually ask the question: "What's next?"

A less-traveled path is to start or purchase a business. It sounds reasonable, but executive and owner roles have less in common than you think. One successful executive is facing that reality right now after leaving SuperValu, Inc. to own a small, Minneapolis-based staffing solutions provider.

Jim Gilliam joined SuperValu in 1982 as a division controller in Ft. Wayne, Indiana. Over the years, he worked his way up through several positions of increasing responsibility to earn the role of President for the company's Northern Region. He oversaw 11 distribution centers in nine states comprising of 4,000 employees. His success included many incentives to stay and enjoy what he'd built, but something pulled him to rethink his future.

"I always had a desire to own my own business," Gilliam said. "Over the last few years of industry and economic changes, it seemed right to start looking for that opportunity."

Gilliam researched online and contacted business brokers. He connected with Dan Mulvaney, a business broker with Sunbelt Midwest who told him about Labor All Personnel. "When I found Labor All, I loved that it was in the people business. I love managing people and I've always been naturally good at it."

Under its second owner, Labor All had over 16 years of experience in staffing services to the industrial sector - representing hundreds of welders, truckers, machinists and other skilled and general labor to fill contracted or permanent staffing needs at companies throughout Minnesota. Researching further, Gilliam discovered a base of 10 employees who matched his profile for growth.

Knowing he could potentially take a major pay cut to pursue ownership, Gilliam put his financial ducks in a row by researching cash available in the company and financing options. Then he looked at the operational cash flow required as well as his personal cash flow to sustain him through the career transition.

Part of negotiations with the previous owner also entailed a month or so of on-boarding for Gilliam to observe operations and tailor his methods from there. The purchase closed in April 2013. One of Gilliam's first changes was an incentive plan of monthly bonuses for hitting sales goals, as well as a profit bonus at year-end.

As of October 2013, the company has been renamed Montu Staffing Solutions and sales are showing 28 percent growth from the previous year. The company now has four offices, in Columbia Heights, St. Paul, Anoka, and most recently Hopkins.

"My goal when I bought the company was that we'd at least match the previous year's performance," Gilliam says. "I freed employees to step up, that I trusted and expected them to do their jobs to the best of their abilities, and they did."

Using his skills in people management, Gilliam has been less hands-on than the previous owner. However, this has freed him to focus on learning the business side of the company - areas that he never oversaw in the corporate structure at SuperValu. The responsibility is on him now to understand unemployment benefits, taxes and banking.

Transitions from executive to owner aren't easy, but Gilliam's leap is showing promise. As a result, Montu Staffing Solutions has a new chapter to write after almost two decades in business.

Tips for Second Career Entrepreneurship

1. Perform due diligence by reviewing financials, revenue by customer, legal issues, and employees to make sure it’s the right opportunity.
2. If it makes sense, negotiate a continued relationship with the seller as a guide to running the business for the first month or so.
3. Create incentives and policies that motivate employees to step up under new ownership.
4. Learn the business side of the business: payroll, taxes, benefits, employment law, etc.

Lessons for Leaders: Managing mavericks featuring Scott Dongoske with Winthrop & Weinstine written December 2013 by John P. Palen for Minnesota Business Magazine

Posted By John P. Palen, CEO & Founder of Allied Executives

Television and movies popularize the maverick charting his or her own course in a hostile and changing environment. We cheer for these people and at the same time wait for their destruction. It's part of the fun.

In a business environment, the fine line between doing it your way and being part of a team isn't just fun and games. Companies need creativity and energy, but they also have responsibilities to produce consistent service and revenue. The backlash against flexible workplaces is just one example of organizations trying to rein in the individual in favor of the bottom line.

What if your organization is made up of mostly mavericks? Some businesses like law firms attract many people who graduated at the top of their class, were great athletes or served with honors in the military. Such individuals are naturally independent, but not necessarily business owners (or partial owners). One law firm has worked to address that distinction.

"Good leaders must balance the bureaucratic process of a business with the mavericks," explains Scott Dongoske, who for 12 years has served as president of Winthrop & Weinstine, P.A., a 200 employee law firm with offices in Minneapolis and St. Paul. The firm has a local legacy that dates to 1979, and Dongoske has been an attorney at the firm since 1983.

Pointing out common ills like pricing pressure and competition, Dongoske says that law firms had to learn a different way of doing business over the past 10 years — or face extinction. At Winthrop & Weinstine, that has meant defining what its 'A' players look like, then constantly reviewing and improving compensation, technology, pricing and processes to support their success. It hasn't always been easy.

"Race horses don't like to be tethered," he says. "So we've created guidelines and evaluations to filter, attract and develop the right people. We want strong personalities who are highly competitive and who communicate very well, but they also need to understand how to act like an owner."

Being an owner means knowing how a law firm has to operate to serve clients and make money, then contributing to that model. From continuing legal education to how marketing dollars are spent and where attorneys network, Winthrop & Weinstine's structure requires a clear ROI for the individual and the firm.

Dongoske compares this task to a professional football coach who has to take a team of self-motivated but highly independent athletes and get them all moving in the same direction. The leadership approach is customized to each athlete, but the goal is the same. Winning football games or winning business, it should benefit everyone.

"Many people think they are a leader, but you're only a leader if you get people to follow you," Dongoske says.

Like Don Draper on the television show Mad Men, being a maverick only gets you so far. Then you have to produce for the company. Anything less is unacceptable if you want to stay on the A-team.

Tips for A-Team Leadership

1. Recognize the mavericks and give them room to differentiate your business.
2. Maintain balance by teaching the fundamentals of owning and operating the business.
3. Create hiring and development protocols that attract A players.
4. Regularly review and maximize compensation structures, technology, pricing and processes that support high performance.

A commanding approach featuring John Hoffman with Principal Financial Group written November 2013 by John P. Palen for Minnesota Business Magazine

Posted By John P. Palen, CEO & Founder of Allied Executives

George Bernard Shaw said that "youth is wasted on the young." Despite their advantages of stamina and mental sharpness, not all young people take full advantage of life's opportunities.

Even if they do, few rise to the level of leadership often found among people in the second half of life. Some would say it takes more than youth to pursue the fast track. It takes sacrifice and boldness and risk.

John Hoffman, 36, is a rare example of those combined traits. As regional managing director of The Principal Financial Group of the Minnesota Business Center in Minnetonka, Hoffman oversees more than 100 independent financial advisors. And he's been doing it since he was 32.

Consistently an exceptional leader and leading one of the top producing offices for The Principal Financial Group, Hoffman's success hinges on a few key beliefs he has followed since starting his career in 2000.

"I soon discovered that I wasn't the best salesperson in the room nor the biggest expert in financial services" Hoffman says. But, he realized, he didn't need to be – he just had to be the best at helping people. Knowing that makes him "one of the most confident people in the room," he says.

He also makes no apologies about the fact that some people may not like him. "I have high expectations of people. They will either get and respect that or they won't. If I do the right things, then people's opinions of me is none of my business."

Hoffman makes no apologies about the fact that some people may not like him. "I have high expectations of people," he says. "They will either get and respect that or they won't. If I do the right things, then people's opinions of me is none of my business."

The "right things" to Hoffman include treating people equally, being respectful to everyone and knowing how to motivate and get the best out of people. When you oversee professionals who are essentially working for themselves, micro-management doesn't fly, he explained. "My role is to serve, support, motivate and challenge them."

When necessary, though, Hoffman pulls no punches. "We have a vision," he says. "If everyone does what's needed to be done to fulfill that vision, then others know we care about them and have their back. When they do not share our plan, vision or results, we have to go our separate ways."

Such a direct approach has come from past experiences of learning when to motivate and trust the results and when to cut losses and move on. The wrong team members can deplete a leader's energy to pursue the vision. "I prefer to come home at the end of each day still full of energy," added Hoffman, who is also a father and a volunteer in business, alumni, church and health care organizations.

So before we paint a picture of an unfeeling workaholic, you should know that Hoffman takes great care to be accessible to his team, to listen and be honest in his dealings. "People have to know you care about them. Leadership and parenting are alike that way. Sometimes it's not about coaching and teaching; it's just about spending time together."

Not all leaders take the direct, commanding approach that Hoffman does. At the end of the day, though, success speaks for itself. And most leaders I know are paid for their results. Admiration can come later when you're older.

Tips for Bold Leadership

1. Be bold and direct with expectations, then work harder than your competitors.
2. Conserve some energy for yourself at the end of the day.
3. Choose people who are self-sufficient and self-motivated and part ways with those who aren't.
4. Accept the fact that a percentage of people will not like you. Do the right things to achieve your vision anyway.
5. Be available when your team wants face time, and listen.