Gomez seeks balance in OCI’s philosophy

The son of an insurance agent, Jorge Gomez couldn’t help but have an intuitive sense of the industry he is now charged with regulating.
During his childhood in California, Gomez heard plenty about the insurance business from his father, who owned and operated an agency for more than 25 years.
"He sold all lines of insurance: individual, group, property and casualty and health," Gomez says of his dad, who is now retired. "I never sold insurance myself, but growing up I felt I got to know the industry because I was always surrounded by insurance guys."
Appointed by Gov. Jim Doyle in mid-February, Gomez succeeds Connie O’Connell as insurance commissioner for the State of Wisconsin. O’Connell, who was appointed commissioner by then-Gov. Tommy Thompson in January 1999, recently left her post to join a Madison law firm.
Watching his father run the agency also gave Gomez an understanding and appreciation for the challenges of managing a family-owned business. He carried those early impressions with him when he moved to Wisconsin in the mid-1980s to pursue a career in law.
After earning his law degree at the University of Wisconsin-Madison in 1986, Gomez joined Legal Action of Wisconsin in Madison, where he represented farm workers in employment and income issues. Two years later, he went to work for the Milwaukee County District Attorney’s Office, where he prosecuted cases in all criminal divisions, including homicide.
In 1996, he became a partner at the Milwaukee law firm of Michael Best & Friedrich, pursuing trial work, commercial litigation and white-collar criminal defense. Gomez also represented physicians and physician groups in government regulation compliance issues.
When Doyle called on him to take over insurance regulation for the state, Gomez was working for United Government Services in Milwaukee, a Medicare and Medicaid claims processing company and affiliate of Cobalt Corp. and Blue Cross & Blue Shield United of Wisconsin, the state’s largest health insurer.
At United Government Services, Gomez was responsible for all legal affairs but also oversaw the areas of regulatory compliance, internal audits and quality assurance.
His diverse career history suits him well to regulate the state’s insurance industry, those who know him say.
"Jorge Gomez brought to us a lot of experience, having worked at Michael Best & Friedrich and the district attorney’s office," said Sandy Coston, president of United Government Services. "In those roles he had a lot of exposure to compliance matters and health care related issues with providers and beneficiaries. Based on his organizational skills, his prior experiences and his ability to manage people and multiple projects, he will do very well in the role of insurance commissioner."
In particular, Coston has praise for Gomez’s people skills.
"He has a talent for interacting with people at all levels, not just his peers in the management ranks," she said. "That’s really a very strong suit of his, as well as his negotiation skills and business planning abilities."
As commissioner, Gomez and his staff of 135 are responsible for examining the insurance industry’s financial health, business practices and the market conduct of hundreds of insurance companies operating in Wisconsin.
The department also licenses insurance agents and administers the State Life Insurance Fund, the Local Government Property Insurance Fund and the Patients Compensation Fund.
Although he’s been on the job for little more than a month, Gomez already has had to address a contentious issue over the governor’s proposal for a one-time shift of $200 million out of the Patients Compensation Fund to help eliminate a $3.2 billion state budget deficit.
The proposal would shift the funds to help maintain medical assistance programs for the poor and the elderly. The Wisconsin Medical Society, representing hundreds of Wisconsin physicians, is against the idea, suggesting it would undermine the fund and possibly push the state into a medical malpractice insurance crisis.
The fund helps cover medical malpractice claims against Wisconsin health providers.
In recent testimony before the Legislature’s Joint Finance Committee, Gomez defended the governor’s proposal, noting that the fund currently has assets of $600 million.
"We have evaluated the impact of the one-time fund transfer, and we believe there will be no immediate risk to cover any claims," Gomez said in an interview a day after his testimony. "There is no risk of a patient not being covered by the assets of the fund."
Other issues that Gomez said will be on his department’s "radar screen" include: credit scoring as a form of insurance underwriting; the marketing practices of insurance companies selling products to the elderly; the practice of debt cancellation contracting; and the problems small employers face in obtaining health insurance.
Asked to describe his philosophy as a regulator, Gomez said: "I have a real desire to make sure that consumers are protected in all sorts of insurance-related matters. With that said, I also recognize that the industry, if it is going to be a healthy industry, has to be able to honestly resolve issues with this office. A healthy tension has to be maintained between this office as a regulatory body and the industry so that there is dialog and an understanding that issues will come up from the consumers’ side of the fence."
Some who represent consumer interests hope the new commissioner will not only aggressively regulate the industry to protect the people, but also help Wisconsin residents find – and keep – their health care coverage. Although the state’s uninsured population remains low compared with those of other states, the number of Wisconsin residents going without health insurance is increasing.
"Under its new leadership, I hope OCI takes a more proactive stance on health insurance issues and regulations by working with a coalition of health care stakeholders and by formulating policy before problems arise," said Barbara Zabawa, staff attorney for the Center for Public Representation, a consumer advocacy group.
However, representatives of health insurance companies say the OCI already has a track record of balancing consumer interests with maintaining a financially secure insurance market. Joseph Kachelski, spokesman for the Association of Wisconsin Health Plans, doesn’t think that direction should change under Gomez’s leadership.
"It’s pretty clear that Mr. Gomez understands the role of the agency, and sure, there will be issues that we want to work through (OCI) at some point in time," said Kachelski, whose organization represents HMOs. "We don’t have any reason to doubt that we will have a good working relationship with him."
The new commissioner is better known in health insurance circles than other areas of insurance, said Eric Englund, president of the Wisconsin Insurance Alliance, a trade group and lobbying association for property and casualty insurers.
"He’s not someone we’re previously aware of, but having met with him, he seems to be someone who, because of his work for Cobalt, comes to the industry with a fundamental understanding of how insurance operates. He seems to be a quick study by the nature of his educational and insurance background. We’re looking forward to working with him."

April 4, 2003 Small Business Times, Milwaukee

An organization devoted to helping small Wisconsin manufacturers remain profitable is the target of budget-cutting measures proposed by Gov. Jim Doyle and the Wisconsin Department of Commerce (DOC).
The Wisconsin Manufacturing Extension Partnership (WMEP) provides subsidized consulting services and training to small manufacturers interested in implementing lean manufacturing processes.
The organization received about $1 million in funding from the state in 2002. State funding and additional revenue from fees charged to manufacturing clients for consulting and training is matched by the federal government.
Doyle said he did not make the original recommendation to cut WMEP out of the budget, and he is holding open the notion of resuming funding for the program in the future.
"Most of those recommendations came from the individual departments," Doyle told Small Business Times. "There are some good things we won’t be able to do for a while. Maybe we can start again when there is money in the budget."
However, according to WMEP executive director Mike Klonsinski, the disappearance of state dollars will mean a reduction in federal funding as well.
"While we have managed to expand with the same level of state support over the past few years, complete elimination of state support would have severe consequences," Klonsinski said. "The problem is compounded because cuts in state support also turn into cuts in our ability to draw federal funds. Just as we have been successful in leveraging over $2 in federal dollars for every $1 of state investment — the reverse occurs when we lose state dollars."
WMEP operates with an annual budget of about a $7.5 million, of which $2.6 million comes from the federal government, Klonsinski said.
Apart from the $1 million from the WDC, the remainder comes from fees paid for consulting and training and contributions from other organizations, according to Klonsinski.
Klonsinski said he and his staff were examining their options, including a reduction of services to small manufacturers, price increases and a concentration of services in higher density areas.
"With federal budget pressures as they are, a reduction in our ability to bring federal dollars to the state to support our efforts may become permanent," Klonsinski said.

April 4, 2003 Small Business Times, Milwaukee

Saz’s Catering will open a deli in the Honey Creek Corporate Center on Milwaukee’s west side in May. The 2,500 square foot Saz’s At Honey Creek will be located on the lower level of One Honey Creek Corporate Center. Once the fourth office building in the complex is complete, scheduled for later this year, the office park, just off 85th Street along I-94, will accommodate 1,500 people.

The deli, Saz’s first permanent off-site location catering to employees, will offer a variety of sandwiches, Saz’s signature items including barbecue pork, festival favorites mozzarella sticks and sour cream and chive fries, and daily specials.
"The building’s developer, Opus North, approached us because of our reputation, as well as our ability to prepare and package food that is easy to take to offices," said Steve Sazama, owner of Saz’s. "We wanted to expand our catering business into an office environment, and we are excited that our initial offering in this area is with one of the city’s most upscale and successful business parks."

George Webb Corp. has launched a new marketing campaign aimed at elevating its image as "a restaurant that serves quality, classic American food while delivering a dining experience with personality," the Waukesha-based corporation announced.
The campaign was kicked off with a five-week schedule of heavy television advertising that features new creative from Eichenbaum + Associates. Sunday newspaper inserts, in-store banners, placemats and table tents are also part of the marketing mix.
"We spent many months researching, evaluating and delving into the essence of George Webb," said Dave Stamm, president of George Webb Corp. "In the end, we decided to focus on what we do best. We pride ourselves on the high-quality food that we serve our customers and the friendly, comfortable environment of our restaurants and are more than ready for our advertising reflect that."
As part of George Webb’s new positioning, Eichenbaum + Associates has created a series of three, 30-second television spots. In each of the "Get Comfortable" TV spots, the camera focuses primarily on the food that’s being served, while viewers hear the relaxed, everyday conversations between customers.
Starting April 27, Sunday newspaper inserts will also be used to promote George Webb’s monthly menu feature and deliver coupons. The FSI strategy is a departure from the company’s previous reliance on couponing by franchisees in local newspapers.
Eichenbaum + Associates won the George Webb account last fall after an agency review. This year marks the 55th anniversary of George Webb, which has 42 restaurants in Wisconsin.

The North Central Association of Colleges and Schools has awarded Mount Mary College in Milwaukee continuing accreditation, with the next comprehensive visit to take place in 2012-2013.
"Mount Mary has received this highest possible rating consistently since 1926, and it is extremely gratifying to have Mount Mary’s achievements acknowledged in this significant way," said Patricia D. O’Donoghue, president of the college.

A Famous Dave’s barbecue restaurant has opened at 2137 E. Moreland Blvd. in Waukesha. The store is the seventh Wisconsin location for Minneapolis-based Famous Dave’s, which now has more than 40 company-owned restaurants and 33 franchised locations in 19 states and the District of Columbia. It has signed development agreements for an additional 118 franchised locations.
The Waukesha location is a franchise operation owned by the same company that runs the Appleton location.
Famous Dave’s of America Inc. was founded in 1995 and is traded on the Nasdaq exchange (DAVE). It reported 2002 revenue of $90.8 million and expects 2003 revenues to be between $108 and $110 million.

Two doctors affiliated with St. Francis Hospital have opened the South Shore Women’s Clinic in the new Midwest Medical Surgical Center, 2603 W. Rawson Ave., Oak Creek. The doctors, Walter I. Melnyczenko and Anthony C. Pagedas, remain on the staff at St. Francis, 3237 S. 16th St., Milwaukee.

Ellingsen Brady Advertising in Milwaukee has added Web and interactive specialist Jeff Hall of Milwaukee to its team as the agency opens Web Ellingsen Brady. "We have found an overwhelming demand for good Web design and strategy that is unmet for many of our current and potential clients," said Tim Brady, vice president of the agency.
Hall holds a bachelor of science in communication degree with an emphasis in art, from Miami University of Ohio. He also has a bachelor in art in commercial art degree earned partially from the Milwaukee Institute of Art and Design. Prior to joining Ellingsen Brady, Hall worked as a Web consultant for Compuware in Milwaukee and as a freelance Web architect.

Jefferson Wells International has moved its corporate headquarters away from its namesake intersection in downtown Milwaukee – the nearby corner of Jefferson and Wells streets. The company, which provides temporary help to professional services industries, has moved its offices to 200 S. Executive Dr. in Brookfield.
The company, which is owned by Glendale-based Manpower, said the move would allow all departments to work at the same location.
Jefferson Wells International was founded as Audit Force. After changing its name, it was sold to Manpower by founder Michael Harris, who is now building a human resources company, Capital H. Jefferson Wells International employs more than 1,500 people in more than 35 offices throughout North America.

Peter M. Mukahirn and Gregory S. Koehler have launched US Technologies in Greenfield after acquiring the computer and networking data services and Web-hosting and maintenance services of Roman TechNet, a division of Roman Electric Co. in Milwaukee.
Included in the transaction were Roman TechNet’s servers and computer networking equipment. US Technologies will handle warranty claims of former Roman TechNet customers.
Mukahirn, 31, and Koehler, 30, had been IT project managers with Roman TechNet for more than two years and previously owned their own businesses. Mukahirn operated PC Connect while Koehler ran Computers Made Easy.

Beachcomber Salon has opened in the Old Main Street at Pewaukee Lake development at the beach in Pewaukee. The salon is part of the village’s downtown and lakeside revitalization effort. Carole Riley, with more than 20 years of experience in the salon industry, opened the business. It is at 161 W. Wisconsin Ave.

Heartland Information Research has outgrown its space in the Professional Dimensions Women’s Business Incubator, a program of the YWCA of Greater Milwaukee managed by the Wisconsin Women’s Business Initiative Corp. in Milwaukee. Owned by Kate Hill, Heartland Information Research is now at 6434 W. North Ave. in Wauwatosa. The company specializes in economic and market research, business and strategic planning for small to midsize companies, business profitability analysis and internal process review and procedure development. Hill founded the company in 1998. She holds a master of science degree in operations research and a bachelor of science degree in statistics and operations research from the University of Maryland-College Park.

Muth Mirror Systems of Sheboygan has signed a supply agreement with US Auto Parts to provide Signal Mirror components and technology for replacement Ford Expedition mirrors that will be sold under the Kool-Vue brand name.

The Douglas Avenue location of Econoprint in Racine has moved to 214 State St., the corner of State and Main streets.

April 4, 2003 Small Business Times, Milwaukee

President Bush’s proposal to eliminate the federal tax on corporate dividends would have a more widespread impact on privately held companies in Wisconsin than on publicly traded firms here.
While most of the debate on the corporate dividend tax has been focused on publicly held companies, the tax change would affect any entity incorporated as a Chapter C corporation – including privately held companies.
According to the Wisconsin Department of Revenue, 57,796 C-corps filed state tax returns here in the 2001 tax season. But according to the ReferenceUSA business directory, only 81 publicly held companies are headquartered in the state. That means a corporate dividend tax cut would have a far-reaching effect on Wisconsin’s privately held business community, far oustripping the impact on publicly traded companies.
While the Senate in late March moved to trim Bush’s $726 billion tax cut package, investment experts here feel the president’s proposed elimination of tax on corporate dividends would have mixed results locally.
Ken Evason, president and CEO of Jacobus Wealth Management in Wauwatosa, said the tax cut on corporate dividends would do little to stimulate the economy. But its elimination would have marked effects on the owners of C-corps and on Wisconsin municipalities.
According to Evason, the elimination of dividend taxes would change the rules for private business owners interested in taking money out of their businesses.
"When it comes to receiving income, people in my business always ask: ‘How do we do it most tax-effectively?’" Evason said.
According to a tax expert with Wipfli Ullrich Bertelson, the biggest change that could result from the removal of federal tax from corporate dividends would relate to how owners are compensated.
"The first thing that comes to mind for example is what would people who have C-corporations do with their compensation," said Mark Krueger, a tax and corporate accountant with Wipfli’s Milwaukee office in Wauwatosa. "Someone’s wage is taxed; but if there is no tax on the dividend, you may have people who are reducing their compensation to what the IRS would consider to be unreasonably low amounts and taking more compensation in dividends."
But while taking income out of a business as a dividend may become more efficient, compensating owner-managers in such a fashion might be tricky, particularly when a number of owners have different levels of equity.
"If dividends are distributed to all the owners of the company, it might appear fairer if compensation is paid out on a fair and proportionate way based on ownership," Evason said.
Evason said it is unlikely an elimination of taxes on dividends would induce many companies to reorganize as C-corps.
"I can’t see that they would do that," he said. "While the tax code would not favor S-corps anymore, S-corps are not disadvantaged."
But both Evason and Krueger agree that when it comes to initial incorporations, C-corps could become more popular.
"When people are starting corporations, one of the big drawbacks to the C-corp is the double taxation of dividends as well as these penalties for having a holding company or having an unreasonable accumulation of earnings," Krueger said. "But with the elimination of the tax, a C-corp could become a tax shelter."
According to the experts, tax-free dividends would help the owners of private companies with issues including succession planning and business investment.
"In succession planning, we used to go through great lengths so that redemption would be classified as a complete termination of interest so you could get capital-gain treatment," Krueger said. "But if dividends are not taxed, you could have the redemption taxed as a dividend. Now, all of the work we go through to achieve capital gain treatment in a redemption – we may not do that anymore."
Without a tax on corporate dividends, business owners might also be more inclined to invest in their businesses knowing they could quickly get money back out, according to Evason.
"The change would make it easier to take capital out of a business," Evason said. "In a perverse way, that could induce people to put money into the business. They might say, ‘Let’s buy a new truck’ or ‘Let’s put a new computer in.’ The idea is they could pull the resulting additional profits back out."
Evason stressed, however, that the big losers from the removal of taxes on corporate dividends would be municipalities. Wisconsin’s economically stressed local governments would have a harder time raising money on the bond market.
"The big benefit to buying municipal bonds is that tax-free status," Evason said. "If people can get a higher return and still not pay taxes on the dividend, municipalities will have a hard time raising funds for infrastructure."

April 4, 2003 Small Business Times, Milwaukee

The Wisconsin Manufacturing Extension Partnership (WMEP) estimates its economic impact on small businesses in the last fiscal year at $148 million.
According to manufacturers’ reports to WMEP, consulting by the program provided the leads to $98 million in increased and retained sales; $25 million in investments in new plant and equipment; and $23 million in cost savings.
Many Wisconsin manufacturers consider the WMEP to be an investment in the state’s economy.
Ann Pettibone, chief executive officer of Drewco Corp., Franksville, estimates the impact WMEP has had on her company at more than $500,000 in the last calendar year alone.
That does not include cost savings Drewco realized by working with a WMEP partner firm to reduce health care costs or the sales gains that Pettibone said resulted from a new Web site developed by another partner firm.
The company manufactures work-holding devices used in manufacturing. Products manufactured by Drewco are used by major manufacturers to hold gears and other parts during machining.
Pettibone and Drewco, which employs 25 to 30 people, first worked with WMEP on a strategic plan in 1999.
WMEP is involved with Pettibone on implementing a lean culture program, which involves employees in the process of lean manufacturing.
"We started 18 months ago on a scheduling program," Pettibone said. "We market ourselves as having the shortest lead times in the industry, but if you are going to do that, you have to continually have the shortest lead times. WMEP’s work took our throughput from 23 days to nine days. That is a significant marketing advantage and has helped us enormously."
Pettibone said the company would not have been able to retain a consultant to help it implement lean manufacturing principles without WMEP’s help.
"It is very cost-effective — at least half of what it would have cost to get it somewhere else," Pettibone said. "We looked at other non-state programs and other consulting, and also compared it to other state programs. I was most comfortable and most impressed with WMEP. … Without WMEP, we would have gone ahead and tried to implement these things on our own."
Bill Piernot, president of Wiscraft/Associated Industries for the Blind in Milwaukee, said the lean manufacturing assistance he received from WMEP has helped his business survive in a more competitive environment.
Wiscraft is a 501.c.3. non-profit corporation, which employs legally blind persons in machining, assembly, packaging and order fulfillment.
"In today’s market, we have to be competitive with for-profit businesses," Piernot said. "We have seen a significant amount of work go to China, Mexico and other overseas locations, as well as the southern US."
Piernot worked with WMEP to achieve Wiscraft’s ISO 9001/2000 certification, which Piernot described as "the latest and greatest" of the quality process certifications.
"For ISO, WMEP was about 60% (of the costs) of a for-profit consultant," Piernot said. "The quality was actually better. The personnel we dealt with and the way they implemented it was better than we would have expected elsewhere. We actually wound up getting certified two months ahead of schedule."
Pettibone and Piernot are united in their disapproval of WMEP’s being zeroed out of the state budget.
"I think it is a bad mistake for the Legislature to take this money out," Piernot said. "This is an investment in future jobs in Wisconsin. This is not a program that hands out money. Manufacturing in particular is under duress right now with foreign competition."
"WMEP is a very important program for manufacturers in Wisconsin," Pettibone said. "It would be a great loss to lose this kind of highly-effective organization. I guess I would want to tell them that from the standpoint of a businessperson, WMEP is an economically wise investment that is going to have significant returns for the state’s economy."

April 4, 2003 Small Business Times, Milwauke

Twenty-eight southeastern Wisconsin companies are among 115 nominated statewide in the 9th annual Wisconsin Corporate Safety Awards competition. Winners will be announced at an April 28 banquet which is part of the Safety & Health Congress in Madison, presented by the Wisconsin Council of Safety.
"Wisconsin companies recognize the importance of a proactive safety culture," said Bryan Roessler, WCS director. "Safety is a key to their success and impacts the bottom-line, making them more competitive and profitable."
Wisconsin Corporate Safety Award finalists must submit information regarding their organizations’ safety and health procedures, policies and accomplishments. An independent panel of judges, including leaders in business, health and safety evaluates the nominations.
The awards will be presented in 16 categories based on employment size and type of business, as defined by SIC code. Nominees must be headquartered in Wisconsin, or have significant Wisconsin management presence.
The Safety & Health Congress and Exposition runs April 28-30. Information on the event is available online at www.wischamberfoundation.org.

Local safety award finalists are:
Aldag/Honold Mechanical, Sheboygan
Associated Spring-Milwaukee Division, Milwaukee
Banta Specialty Converting, Milwaukee
Borg Indak, Delevan
C. G. Schmidt, Milwaukee
Clean Power, Milwaukee
Electro-Pro, Cedarburg
Geneva Lakes Cold Storage, Darien
Great Lakes Roofing Corp., Germantown
Johnsonville Sausage-Riverside, Sheboygan Falls
Lucas-Milhaupt, Cudahy
Magaw Electric Construction Co., Sturtevant
Magaw Electric, New Berlin
Martin Petersen Co., Kenosha
Molded Dimensions, Port Washington
Northern Electric, Green Bay
Orbis Corp., Menasha Corp. subsidiary, Oconomowoc
Ranch Community Services, Menomonee Falls
Richardson Industries, Sheboygan
Riley Construction Co., Kenosha
Rockwell Automation-Mequon, Mequon
Rockwell Automation-Milwaukee Campus, Milwaukee
Sentry Equipment Corp., Oconomowoc
Sta-Rite Industries, Delavan
Wachtel Tree Science & Service, Merton
Waukesha Engine, Dresser, Waukesha
We Energies, Milwaukee
Western Products, Douglas Dynamics, Milwaukee

April 4, 2003 Small Business Times, Milwaukee

Businesswoman brings together public and private sectors

In an economy where businesses and non-profit organizations are struggling to make ends meet, Teri Sullivan bravely set out to form her own company and help the community at the same time.
The Cedarburg woman is doing just that.
A veteran of Milwaukee’s nonprofit sector, Sullivan formed Sulli & Associates, a for-profit company that builds partnerships that often involve the public, private and nonprofit sectors.
Sullivan teamed with Kim Abler, art curriculum specialist at Milwaukee Public Schools, to secure a $228,000 grant from the US Department of Education for the 2001-2002 school year. With the grant, they partnered with MPS to launch Cultural Partnerships for At-Risk Youth, a unique arts integration program serving middle school students.
"The program has an impact on many different groups, from artists and arts-based nonprofits to educational institutions, teachers, small businesses and, best of all, students," Sullivan says. "It’s a program that generates real benefits for all."
Originally designed by Abler, the project began as a pilot program that reached students in four Milwaukee middle schools: Lincoln Center Middle School of the Arts; Ralph H. Metcalfe K-8 School; Jackie Robinson Middle School; and Walker International Middle School.
Blending community arts partners such as the University of Wisconsin-Milwaukee, Fitzsimonds Boys & Girls Club, Danceworks and Walker’s Point Center for the Arts with those schools, the pilot program achieved measurable results, including:
— Arts-related opportunities for students were increased by at least 75% at Jackie Robinson Middle School and Metcalfe School and by at least 50% at Walker International Middle School and Lincoln Center Middle School.
— Arts were integrated across the curriculum at the schools.
— Arts community organizations developed educational programming that is more responsive to the needs of at-risk students.
The Department of Education deemed the program a success and expanded it for three years with a $1 million grant. The program now serves six middle schools, one K-8 school and one high school, and the project is growing significantly.
"What I do is listen to someone who has an idea. Then, I put the puzzle pieces together," Sullivan says.
The impact of the arts on learning has been documented.
One researcher, James Catterall, noted in his study, Champions of Change: The Impact of the Arts on Learning, that, "students with high level of arts participation outperform ‘arts-poor’ students by virtually every measure …. It makes a more significant difference to students from low-income backgrounds than for high-income students."
The impact of Milwaukee program goes beyond helping low-income children.
The program has created several options for professional development that MPS teachers can use to enrich their skills to develop an arts integration curriculum by attending courses at the Milwaukee Institute of Art and Design’s Creative Educator’s Institute (CEI).
The CEI is an intensive studio residency for teachers promoting the use of new technology in combination with traditional art and design media and practices. Through the Cultural Partnerships program, 24 teachers will be given scholarships to attend the CEI courses.
"It has been great to be able to build a more sustained relationship with teachers at MPS through the Cultural Partnerships for At-Risk Youth. Not only do we give the teachers direct professional development, but we also can work directly with their students," says Josie Osborne, director of outreach at MIAD.
Another benefit is the impact the program is having on arts organizations and artists in Milwaukee, who are given opportunities to expand their services and ultimately to increase their revenues and sustainability.
The program also is helping Milwaukee’s small-businesses, some of which are securing work to help the project.
With its impact on students, teachers, arts organizations, educational institutions and small businesses, one would think the program would be cumbersome to manage. "The money goes to the program," Sullivan says. "With only 5.44% of the funds utilized for indirect costs, you can see the program is more than just a success for the students — it’s a success for the Milwaukee community as a whole."

KeleMarie Lyons is the founder of Pinnacle XL, a management consulting company with offices in Milwaukee and Chicago. She can be reached via e-mail at kelemarie@pinnaclexl.com.

April 4, 2003 Small Business Times, Milwaukee

What’s the best form of advertising there is? Word-of-mouth. There are hundreds of occasions when people ask others — friends, relatives, business associates — for a recommendation for a doctor, a plumber, a hotel, a restaurant or a movie.
If we trust the person making the recommendation, we often act upon the referral. And some lucky business gets one more customer without having to spend a nickel on advertising or promotion.
Word-of-mouth is the only method of promotion that is of the consumer, by the consumer and for the consumer. Every business owner dreams of having loyal, satisfied customers who brag about his business to others. Not only are they repeat purchasers, but they become walking billboards for his company.
Best of all, it’s one of the lowest-cost forms of promotion there is. Keeping in touch with satisfied customers and encouraging them to talk up your business costs relatively little.
Here are five word-of-mouth marketing tips that can help you build a network of referral sources:
1. Get your customers involved – Encourage your customers to become involved in the process of making or delivering your product or service. This personal experience creates a sense of camaraderie and positive feelings that lead them to talk about your business to their friends.
Solvang, Calif., a popular tourist destination, is the home of at least a dozen candy and fudge shops. One of the most successful has the big marble slab where they mix all the ingredients right in the window, where passers-by can’t miss the display.
Many stores put their mixing table in the window. But what makes this store unique is who mixes the ingredients: kids. Children roll up their sleeves, put on plastic mitts, and start mixing and folding the rich chocolate, creamy caramel and chopped walnuts, all spread on a well-buttered table. Guess which fudge shop gets good word-of-mouth (every pun intended) advertising?

2. You scratch my back, I’ll scratch yours – If your business receives referrals from another business, reciprocate. Refer business to the referrer. Or at the very least, offer the referrer a discount price.
My piano tuner gives me 50% off my next tune if I refer business to him. It’s a good deal. I keep the piano in tune for a reasonable price; my friends get their pianos accurately tuned by a professional; he gets additional business from my piano-playing circle of friends.
If your business can’t offer a discount, there may be other ways to reciprocate. Consider a small gift or gift certificate. One client sends out gift certificates to a clothing store for referrals, an appropriate gift since he is in the dry cleaning business.

3. Tell stories – Stories illustrate a specific idea or selling point. A story is an effective vehicle for spreading reputations because stories communicate on an emotional level. If you have a company newsletter or brochure, include a story or two about your company that readers can pass along.
Nordstrom’s reputation for good service is legend. In her book Fabled Service, Betsy Sanders, a former Nordstrom vice president, recounts the story of a woman in torn and filthy clothes who walked into a store one day. The sharp contrast between the disheveled itinerant and the bodacious abundance of the store drew the attention of a local minister who was shopping nearby.
When the bag lady entered the pricey Special Occasions Department, rather than being asked politely to leave the store as the preacher expected, she was greeted warmly and allowed to try on gown after gown. The salesperson exhibited infinite patience as she offered comments on which evening dress was most appropriate, which was most flattering. The old woman left the department store with her head held high, a spring in her step.
The minister was so impressed, she told the story to her congregation. Later, word of the minister’s sermon, "The Gospel According to Nordstrom," was mentioned in The New York Times. It became so popular that her church eventually sold audio tape copies.

4. Teach your customers – Some companies have found that by educating their customers, they can boost their reputation and customer loyalty. Pick a topic relevant to your best customers and make yourself the source of credible, current information about that topic.
One paralegal services firm I worked with used this technique effectively. In every newsletter, the firm included a column on legislation, either pending or passed, that would affect the legal community.
Research discovered it was the most-often read portion of our newsletter. Lawyers, the firm’s primary customers, looked forward to the "news bites" on legislation in their field. It was a great way for the lawyers to remain current, and a great way to keep our client’s name in front of their best customers.

5. Fix problems fast – Nothing grates more than the slow resolution of a problem. Speedy response is vital to prevent negative word-of-mouth from spreading. Negative feelings about a product or service may linger for years.
Think about a restaurant where the food was awful, or you received exceptionally poor service. You probably wouldn’t recommend the place to friends. More likely, you might tell them to avoid it, even years later, because of the problems you had.
Research shows that for every bad experience, we tell four friends. While for every good experience, we tell, on average, just two and a half. When faced with a complaint, the response of your employees should be, "How can I send this person away happy?"
The best form of advertising is word-of-mouth. And certainly the best way to get positive word-of-mouth is by providing a quality product or service that meets the needs of your customers.
But there are ways to encourage your happy customers to spread the good word.

Robert Grede, author of Naked Marketing – The Bare Essentials (Prentice Hall), teaches marketing and entrepreneurial management at Marquette University. Learn more on marketing at www.thegredecompany.com.

April 4, 2003 Small Business Times, Milwaukee

Sales-support tools are for support; you still need to do the selling

By Marcia Gauger, for SBT

Question: I’ve used PowerPoint for formal presentations and would like some tips about how to design meaningful presentations to use during sales calls. Can you help?

Answer: Technology offers many wonderful new sales tools. You have to remember that whatever support materials you use on sales calls, they’re just that — support materials. Don’t rely on any support piece to do your selling for you.
Sales tools should be utilized to pique interest, help explain concepts that apply to each individual buyer’s unique interests and support solutions that you can provide to specific customer needs.
If well designed, you may be able to use the same PowerPoint presentations you’ve been using during customer calls. Whatever medium you choose to communicate your company’s capabilities, make sure it’s flexible enough to address individual needs and solutions.
If you use a generic approach, you’ll be communicating to customers that you don’t really care about their needs, only about what you can do. You don’t need to tell your customers everything that you can do. You will seem more capable if you focus on what you can do to support their needs and emphasize those capabilities only.
If you are unsure about the type of presentation that you should make, ask your customer! You may simply say something like, "How would you like to see the information presented at our meeting?" or "Would you like to see a more formal presentation of our capabilities or an interactive exchange?"
By gaining insights about the customer’s needs and who will be attending the meeting, you will gain insights as to the type of presentation to make.
Laptop presentations can appear more "formal" or rigid than other sales methods. Don’t let your laptop become a pitchbook. Here are some guidelines for utilizing technology effectively in a sales call or presentation:
Know your technology – If you are preparing a laptop presentation, be sure you understand how everything works and how to fix anything that could happen during your presentation. If you are not comfortable with the technology, take a class and practice utilizing it prior to your calls.
Make prior arrangements with the customer – If you are presenting to a committee or large group of people, make sure you understand room setup, lighting, power needs, etc., prior to arriving for your meeting.
I was recently involved in a competitive sales situation. I saw my competition leaving with suitcase in hand prior to my meeting. When I was greeted by the person who is now my client, she expressed how frustrated she was with the sales person.
She went on to explain that she didn’t know the salesperson was planning on using a projector system. Valuable presentation time was spent setting up, the system crashed three times and all while the president of her company waited patiently for an interactive discussion of their needs.
Follow the 3×4 rule – The biggest mistake I see salespeople make in designing PowerPoint presentations is that they tend to put too much on the screen. A good rule of thumb is no more than three rows of four words, or four rows of three words. Use bullet points and talk to those points.
Don’t read to the customer. If you have technical information that you think the customer needs, consider leaving a handout when you leave. Or, send information prior to your presentation for your customer to read and be prepared to discuss the information at your meeting. Use a serif font – they are easier to read.
Involve the customer – Plan questions that would engage your audience in your presentation. If you are working one-on-one with the customer, technology can be a wonderful way for customers to customize their own solutions. For instance, formulas calculating return on investment are a wonderful way to emphasize cost-benefit relationships in a meaningful way for the customer.
Emphasize value for the customer – Too many presentations focus on features and benefits. Take it a step further by emphasizing value.
In other words, why should the customer care? Use value statements as bullet points and talk about how you accomplish those values through the benefits and features of your products. This is especially important early in the presentation to gain interest.
Your technology should be transparent – Regardless of the sales tools that you employ, they should be transparent to the customer. If the customer is focusing more on your medium than on the solutions that you can provide, you’ve missed the boat.

Marcia Gauger is the president of Impact Sales, a performance improvement and training company with offices in Wisconsin, Florida and Arkansas. You can contact her at 262-642-9610 or marciag@makinganimpact.com. Her column appears in every other issue of SBT.

April 4, 2003 Small Business Times,Milwaukee

As real estate developers ponder the best uses of land on the north end of the Port of Milwaukee, a lake ferry could ultimately spur development on the south end.
Lake Express LLC, a group led by Milwaukee investor David Lubar of Lubar & Co. Inc., is securing the financing to launch the Lake Express ferry line that would enter at the port’s south end and dock near the base of the Hoan Bridge.
The ferry will carry up to 250 passengers and 46 automobiles per trip between Milwaukee and Muskegon, Mich.
The ferry would operate from May 1 through Dec. 31, making three roundtrips per day. Each trip across Lake Michigan would last about 2 and a half hours.
Kenneth Szalli, director of the Port of Milwaukee, told Small Business Times that an announcement about the progress of the ferry service would be made soon.
"They are working out the details now," Szalli said. "They’ve signed the shipyard contract, and they’re finalizing the long-term financing. The equity is in place."
Lake Express received a $500,000 loan from the Milwaukee Economic Development Corp. last month, and a Milwaukee Common Council committee recently endorsed a lease for a $2 million terminal to be built at the south end of the port in the Bay View neighborhood.
David Lubar was out of the country and unavailable for comment on the ferry project.
"We’re still working with the financing," said Oyvind Solvang, a partner with Lubar & Co.
In its filing with the city, Lake Express estimated its total cost at $22 million and predicted the project would create about 40 full-time jobs. Sources said the ferry could carry as many as 100,000 passengers per year.
The site of the proposed terminal for the ferry is near a US Coast Guard station and a US Naval & Marine Corps Reserve Center at 2401 S. Lincoln Memorial Drive.
Those two buildings eventually could be razed or renovated to make room for commercial businesses that would be compatible with the ferry service, according to sources involved with the ferry project.
The emergence of a commercial district to cater to ferry tourists from Michigan could funnel traffic into Bay View and could be the catalyst for the redevelopment of Kinnickinnic Avenue, Szalli said. (See accompanying Q&A.)
Ald. Suzanne Breier, who represents the Bay View neighborhood, is "thrilled to pieces" about the prospects of the ferry loading and unloading thousands of tourists in her district.
"It would benefit my district, and it would benefit the whole downtown," Breier said.

April 4, 2003 Small Business Times, Milwaukee

Economic picture may be bleak now, but there’s reason for optimism

Commentary, bu Bob Chernow, for SBT

The economy is in painful contraction. News of layoffs, plant closings and bankruptcies pervade us daily. The stock market seems like a ski slope with no snow. State and local governments are cutting into muscle and bone. The dreaded "disinflation" word is common lingo. War, justified or not, gives us nightmares.
Times are hellish. Yet what we are seeing and feeling is but the downside part of a transformation that happens once every 55 or 65 years.
This present adjustment is similar to the process set in motion with the introduction of the automobile in the early 1900s. Will Durant, who founded General Motors and Chevrolet and subsequently lost General Motors twice, personifies the development. It was a time period characterized by numerous start-ups, inventions, innovation and great productivity improvements. Electricity became a new source of light and power. The telephone made its way into homes and businesses. The car and truck supplanted rail. Mass production replaced crafted products.
That transition was not smooth. There were numerous recessions and depressions, with accompanying business failures and mergers, as well as government and business fraud and corruption. Fortunes were swiftly made and then precipitously lost. Stocks and bonds boomed and busted.
Does this sound familiar? This is not a lesson of history, since few learn from the past. Rather, I am illustrating that parallels in economic cycles exist.
I believe that we will soon surface from the negative part of this cycle soon.
Many companies and industries will disappear. But new businesses and industries will emerge. This is the Darwinian in our capitalistic system – part good, part cruel, but always dynamic.
Wang Computers was once one of the top 100 companies in the US. Its product was superior; its expertise sought. But today that company and its products no longer "exist." Wang could not overcome change and the future passed it by.
Examples of developing technologies coming to the front include: advanced biochemistry, genetic engineering, digital electronics, microwaves, photovoltaic cells, fiber optics, lasers, optical data storage, artificial intelligence, fiber reinforced composites, new polymers, molecular designing, thin-film deposition, and high tech ceramics. Nanotechnology, a subject of science fiction a few years ago, is now part of the experimental landscape.
Many of these "new fields" have the potential to increase productivity on an exponential scale, with increases of 5,000% to 10,000% attainable. Impossible, you say? History has demonstrated that the magnitude of such gains is feasible. The downside is that many old industries will be obsolete.
After the American and French revolutions, there was a period when we saw productivity gains even higher than 5,000% to 10,000%.
Those productivity gain giants included the introduction of the cotton gin, the sewing machine, the McCormick reaper, steam power and the ability to transport and store food.
In the last century, we had the introduction of the automobile and truck, electricity (and the ability to transfer it over a long distance), the telephone and short wave radio. Here we begin to comprehend the magnitude of change that occurred in the early part of the last century.
It was not without significant social and economic disruption.
The key, of course, is not only the "invention" but also the adaptation and acceptance of the innovation. Human capital and human adoption of innovations are the crucial variables in this equation. For example, while development of the fax preceded that of the telephone, its use has only gained wide acceptance in the last 25 years. On the other hand, wireless phone and the Internet have had much speedier adoption.
While I anticipate an upturn in the current cycle, there will definitely be winners and losers.
For example, thin-film deposition could radically alter the razor blade industry by providing a permanently sharp razor. It easily follows that such an advance would eliminate the need for replacement blades.
In the health industry it is not unimaginable that diagnostic equipment will assess patients, while nurses assume many of the general functions of physicians. Our health care system will feature highly specialized physicians, but relatively few general practitioners.
What point am I trying to make? It is simply that the road ahead is bright and optimistic. Right now we see only darkness. Businesses are failing. People are being laid off. The stock market continues its retreat. Yet, when we view where we are in a historical perspective, we see this as part of a cycle, a cycle that will turn upward. New industries will spring up from the ashes of the old, and prosperity that we have only dreamed of will be within our reach.
It is always darkest before the dawn.

Bob Chernow is a Milwaukee businessman and a futurist.

April 4, 2003 Small Business Times, Milwaukee

A group of churches representing Milwaukee’s inner city is pushing for a list of requirements on the redevelopment corridor cleared by the removal of the Park East Freeway at the north end of downtown Milwaukee.
Milwaukee Innercity Congregations Allied for Hope (MICAH) and a coalition of community and labor groups planned a meeting April 3 at Mt. Zion Baptist Church, 2207 N. 2nd St.
MICAH leaders had already met with city aldermen and personnel at Milwaukee County and the Milwaukee Department of City Development.
John Goldstein, president of the Milwaukee County Labor Council, is among those spearheading the movement toward community benefit agreements (CBAs), as they are referred to in a MICAH position paper.
Goldstein discounted the idea that existing forms of regulation, such as zoning and land use rule, could help accomplish MICAH’s goals.
Zoning for redevelopment uses that deliver higher-wage jobs, rather than retail or hospitality jobs, would not resolve the problems of unemployment and low-wages for neighborhood residents, he said.
"Even if you are talking about retail, we should be raising the bar," Goldstein said. "There is no reason someone in retail in this downtown area should be making only $6 an hour."
According to MICAH lead organizer Jose Perez, the group would like to require the majority of jobs in the corridor to pay $9 per hour or more.
CBAs for redevelopment in the Park East corridor, according to the position paper on MICAH’s Web site, should mandate:
— Use of locally-owned operators and contractors.
— Maximization of union jobs or neutrality agreements to protect workers’ rights to organize.
— Programs to make job opportunities in the corridor available to residents of neighborhoods with high unemployment. Employers would be forced to hire a percentage of workers from specific zip codes or work through a community group recruiting workers from the outlying area.
— Contributions to a fund to be used to improve parks in the city’s poorest neighborhoods.
— At least 20% of the housing built in the corridor must be affordable, defined as housing priced low enough that low-income families can afford to live there.
While proponents of relatively unrestricted development in the Park East corridor claim that allowing development to progress unhindered will lead to job opportunities and higher property values for those in surrounding neighborhoods, MICAH leaders claim that higher property values may actually hurt neighborhood residents.
"The development should take into consideration the people who live near it," said Harold Owens, MICAH treasurer and Mt. Zion Baptist Church trustee. "My church is just north of Brewer’s Hill. There were a lot of people who were forced out of their homes (by increasing property taxes) when those property values went up."
"Our members would love to be able to afford to live in Brewer’s Hill," said MICAH president Joseph Jackson, pastor of Evergreen Missionary Baptist Church.
Jackson and Owens said the types of jobs they want for their neighbors are the types that GE Medical Systems would bring if it moved its IT department downtown.
"Every one of those jobs would pay more than $9 a hour," Jackson said.
Perez characterized the CBA proposal as a moderate, but deliberate, effort at spreading the wealth to be created in the Park East corridor that should not adversely affect smaller businesses with limited ability to monitor their hiring and compensation practices.
"It is a very intentional approach," Perez said. "Smaller businesses are fine, as long as they are paying people. All we want is 15% above the poverty standard and only 75% of the jobs meeting the poverty level."

April 4, 2003 Small Business Times, Milwaukee