While the Internet is taking the world by storm, it hasn’t brought everyone into its grasp. Not yet, anyway.
For those unfamiliar with the basics, Wauwatosa’s Terri Liska offers some background information on the Internet and its World Wide Web. Liska is the founder and owner of Cyber-Dog Marketing Solutions, a Internet-focused marketing agency.
The Internet offers businesses two useful components: e-mail and the World Wide Web. You might consider the Internet as a highway, and the Web as stores and other businesses and organizations along that highway; e-mail is the postal service.
The prime attribute of the Web is its ability to store and allow for the easy transfer of graphical information – pictures and other visual elements. Without that attribute, it would only be practical to send textual information over the Internet.
Thus, Websites can offer words, still and moving pictures, and sound – all in a package that can be accessed via other computers which are hooked up to the Internet.
A further attribute of Websites is interactivity. You can track the number of people looking at your site. And you can set up sites that allow immediate reader response, including purchases – “electronic commerce.”
E-mail is another use of the Internet that offers quick, individual or broadcast communications. Both text and graphics can be e-mailed.
To get on the “information superhighway,” you need an Internet Service Provider (ISP) such as America Online or Exec PC. Having a provider allows you or your firm to create a Web page and have e-mail capability.
Your ISP is connected to what are called “hubs.” There are fewer than a dozen hubs in the United States, Liska says.
The hubs, besides being connected to each other, are connected to your ISP (or other providers) where they connect the ISP computers (servers) to you via a phone or cable line which is in turn connected to your computer.
When someone looks up your Website’s Internet address or Uniform Resource Locator (URL), your URL represents a series of what are called protocols, which are transmitted through the telephone line and are followed to the source of the protocol (which is your ISP). When it finds the protocol, it grabs all text and graphics stored on the servers for your Web page at your ISP and is able to display the information to the user.
E-mail works almost the same way. When you establish an account with your ISP, you are assigned an e-mail address. The mail is stored in your unique “mailbox” at your ISP. A number of “aliases” can be set up, allowing one e-mail address to have different names.
April 1998 Small Business Times, Milwaukee
Internet 101 The basics of the Internet
Hangin’ on to the past? Gipfel Union brewery building, commentary
Or does it represent an impediment to redevelopment?
All but the purist preservationists have to wonder about the insistence among city officials to save the decrepit Gipfel Union Brewery building in downtown Milwaukee.
The building has been an eyesore in downtown Milwaukee for years.
Now, with engineers saying the building is facing imminent collapse, it’s fostered another bother: city officials have blocked two of the four lanes on the busy stretch of Juneau Avenue fronting the property.
City officials say the structure, built in 1853 and now the oldest brewery building in the city, should be saved, not only for its significance to the city’s brewing history, but also because of its rare federal-style architecture – a plain style which offers few distinguishing characteristics.
The building owner and city government forces have been battling over the future of the property. The owner wanted to tear it down; the city wants it preserved.
A prospective savior has emerged who says he’ll determine whether it makes economic sense to buy the property and make a brewpub.
But one look at the building makes the passerby wonder what all the preservation fuss is about.
If razed, it’s not likely the community would lament its passing the way it did the loss of the North Western railroad depot. Few would notice.
Circle of influence, sales
More contacts build stronger relationships
Ever have the gut feeling that you’ve made a sale, but then, somewhat unexpectedly, someone else in the company changed his mind and left you out in the cold?
When salespersons limit their customer contact to just one person, they have a one-dimensional connection. Influencers have a big say in many company’s buying decisions, and smart sales people are getting to know them.
A rep for a computer networking firm told me he had 33 people to sell as one customer. One was purchasing, three were management, and 29 were end users who had reservations about the new system.
If the 29 users weren’t sold on him and the system, the sale might well be lost to a competitor. After an extensive series of fact-finding meetings and demonstrations, the sale was made. All 29 endorsed his system to their supervisor and management.
While most sales won’t have that many buyers, it’s a sure bet that more than one person will have influence.
Some companies insist you communicate with one person only. So be it. Just make sure you’re not putting his success – and your future sales growth – in jeopardy by working with limited information. And, don’t rely too heavily on that customer for continued sales growth.
In order to have a true partnering relationship, you have to become more involved.
The best place to start is at the top. When calling a prospective customer, ask for the president before asking for purchasing. [You’ll probably get an extremely helpful executive secretary who can give you other names.]
Contact, and stay in touch with, each of them by phone or mail. They should know your name – and you should know theirs.
With current customers, find out who approves your type of expenditures, who will be the end users, who manages the end users and who are the buying assistants. There may be others, too, but as a start, get connected to those people who influence the purchase of your product or service. Their input to you is vital.
Other ways to make multiple connections include asking to sit in on a portion of a group meeting or attending open house events.
Nobody has to tell you that businesses are putting more demands on their people to be productive and cost-effective. They, in turn, place more demands on their vendors. You can stand out from the competition by building deeper, partnering relationships. To them, you become more than just a vendor, you become an indispensable resource.
10 tips
For Building Contacts
1 Always start at the top
Keep in touch with everyone you talk to.
2 Put yourself in the buyer’s shoes
Think in their terms.
3 Learn their buying process
Who reviews or approves proposed purchases?
4 Ask to meet with end users
Their input is vital, and they’ll appreciate being asked.
5 Suggest doing a group Q&A meeting
Brown-bag vendor lunches are a great way to meet influencers.
6 Be pro-active in contacting management
But don’t leave the buyer believing you’re going over their head for the sale.
7 Follow up with everyone
Send “thank yous” to all contacts, and stay in touch with them.
8 Attend open house events
Be visible, and get to know their staff.
9 Make the corporate office contact
Get to know influencers at the main or regional offices.
10 Create a two-way dialog
Get to know influencers, and let them get to know you.
Joe Guertin is president of Joseph Guertin & Associates, an Oak Creek-based speaking, training and coaching firm. Your comments are invited at 414-762-2450, or jguertin@tcccom.net.
April 1998 Small Business Times, Milwaukee
Employee handbooks still essential
But with so much change taking place in today’s workplace, are employee handbooks still essential? Yes, they are.
However, outdated handbooks can pose a legal trap for business owners and their supervisors, based on court decisions in which an employee handbook was determined to be an employment contract, prompting the judge to prevent or reverse a termination decision and substantially fine the employer.
A review of the evolution of handbooks provides insight into why some employers believe handbooks create more risks than benefits.
Prior to 1964 (passage of Title VII of the Civil Rights Act), “at-will” employment was not challenged. In fact, court decisions confirmed that the at-will employment doctrine was strong – employers or employees could terminate the employment relationship for any reason, at any time.
Under at-will employment, employers had no reason to think that employee handbooks could be interpreted as employment contracts. Consequently, handbooks were written to be informational and often included a touch of “PR” – for example, welcoming employees and indicating the company was looking forward to a long and prosperous relationship with them.
The term “permanent employee” was commonly used in handbooks in the 1960s, ’70s, and ’80s. Presumably it was a convenient way to distinguish from “temporary employees,” and not meant to be interpreted literally.
Besides Title VII, numerous laws were enacted in the late ’60s and ’70s that eroded at-will employment. Many were much-needed and had excellent intentions. In response, however, employers began to establish policies and document their actions to protect themselves against legal claims that they were violating these laws.
Many companies gave their employee handbooks a major overhaul in the late ’80s, after a few creative individuals convinced a few equally creative judges and/or juries that statements in handbooks constituted employment contracts, and therefore negated or drastically altered the at-will employment relationship.
The Wisconsin Supreme Court contributed to the transformation of employee handbooks with a landmark decision in 1985. It ruled that an express contract was created when an employee (the plaintiff) accepted a handbook that contained a “just cause” standard for terminating employees.
The continued erosion of at-will employment over the past 10 years provided ammunition for those who argued that handbooks should be construed as employment contracts and thus limit an employer’s right to terminate. Handbooks found to create an employment contract typically include references to:
While some employers fear that a handbook could result in lawsuits and monetary damages, the value and benefits of a well-written and consistently applied employee handbook far outweigh the potential risks. Among the benefits of an effective handbook are that it:
The content and tone of a company’s handbook clearly indicate how a company intends to communicate with its employees. An outdated or nonexistent handbook also conveys a clear message.
Use the following checklist to evaluate your current handbook, especially if it hasn’t been updated in the past two years. Or use it as a guideline if you’re planning to develop a handbook but aren’t sure where to start or what to include.
Jim Rittgers, SPHR, is the director of human resources for EPIC Staff Management, a Milwaukee provider of HR and safety outsourcing services. Comments and questions are welcomed via e-mail to jrittgers@epicstaff.com.
Test your handbook’s health
If you can answer “yes” to all of the following, your handbook is most likely an effective communication tool that promotes positive employee relations and will be valuable in defending employment-related legal claims.
April 1998 Small Business Times, Milwaukee
Lighten your load ? professional employer organizations
Professional employer organizations go to work for you
Until recently, when an employee of Racine Danish Kringle Co. had a question about a health insurance claim or needed to know how many vacation days they were entitled to, the answer was not always readily available.
That’s because, like many small businesses, the 40-employee bakery did not have a human resources department.
But, exactly one year ago, Mike Heyer turned Racine Kringle into a more professional organization overnight when he linked up with a professional employer organization (PEO).
Now, if one of his employees has a personal problem they can call an 800-number and receive the proper assistance. New hires receive an employee handbook – something that Racine Kringle previously could not offer. If Heyer has a human resources/employment-related question, he can pick up the phone and get an answer right away from his PEO, Synergy, which has corporate offices in Chicago.
“As the company is growing, I really can’t afford a separate human resources department right now,” Heyer says. “They take over that entire process.”
PEO’s are emerging as a means for small to medium-sized companies to obtain affordable employee benefits and acquire professional human resources administration through a single source provider.
While the concept is still new to Wisconsin, more than 3 million people nationally work for an employer who is enrolled in a PEO. According to the National Association for Professional Employers, that figure is expected to grow at an annual rate of between 20 to 30 percent over the next 10 years – an estimate backed up by Wall Street analysts.
“A small business can offer better benefits this way, which becomes a competitive edge,” says Dan Cacchione, vice president with CNA UniSource in Chicago. “Small businesses can now literally offer employee benefits where before larger employers only had access.”
A principal advantage of going with a PEO is the ability to obtain lower worker’s compensation rates. That’s because CNA UniSource can offer group rates by pooling a small business together in large groups, Cacchione says.
Several business owners say the PEO more than pays for itself. Having just completed its first year in a PEO, Heyer says that Racine Danish Kringle saved money, largely as a result of the favorable worker’s comp rates.
Going with a PEO should result in a cost savings of 10 to 15 percent on worker’s compensation insurance for Lurie Glass Co. compared to what the 125-employee company could have done on its own, adds president Marc Lurie.
“Prior to this, we would do everything in-house,” Lurie says. “We are now considered employees of CNA. They do all the HR, worker’s comp and payroll, and they do it on a more cost-effecitve basis than I can do it myself. It also means that the people who were being pulled away from their main responsibilities can concentrate and be more effective.”
What the PEO does is work side-by-side with the business owner to relieve some of the daily frustration, Cacchione says.
“For small businesses of 500 or fewer employees, what we typically hear is that time is at a premium,” Cacchione says. Whether it’s finding time to spend on your business, or away from your business, it’s getting tougher to do everything. By outsourcing your personnel matters, the idea is to make the job of running the business easier.”
Responsibilities for employers continue to increase as far as complying with federal regulations. What a PEO does is step in and take over that responsibility, Cacchione says.
“We become the compliance arm for a small business to make sure that they are doing what they need to from a regulatory standpoint.”
Adds Heyer: “They keep up all of my OSHA requirements, which is something I never really looked at before.”
Other areas overseen by the PEO include the Americans with Disabilities Act, the Family Medical Leave Act, the Civil Rights Act, ERISA, COBRA, HIPAA and EEOC.
Synergy also provides supervisory training and safety awareness. In March, employees of Racine Danish Kringle attended an onsite sexual discrimination seminar.
“It was designed to make sure that we are within the proper guidelines,” Heyer says. “Some people laughed about it, but, my God, we are all sitting on a bubble with this. I thought it was a real proactive approach.”
What first prompted Heyer to make the switch to a PEO was the ability to bring health and worker’s compensation insurance under one roof. But, in the process, he got much more, including payroll service.
Under the arrangement, the PEO establishes a contractual relationship with the employer which establishes it as an administrative co-employer with clearly defined responsibilities. The employer still maintains ownership of the business, and also remains in complete control over personnel decisions.
“People think that if they go this route, they lose control of their business, which is ridiculous,” says Jim Ford, president of Mobile Diagnostics of Wisconsin.
In one complete package, Synergy provides: payroll processing and administration; employment taxes and reporting; group health insurance, worker’s compensation; 401(k) and Section 125 plans; policy manuals and job descriptions; hiring and dispute guidelines, and human resources management.
Optional benefits fits such as denatal and life insurance are available, as are purchasing discounts at major retailers. All PEO plans are individually tailored to the needs of the employer.
As the former chief financial officer for Carson Pirie Scott in Chicago, Ford can appreciate the economies of scale he gains from going with a PEO as the head of a five-employee business.
“For one, you’re crazy to do payroll processing on your own,” Ford says. “Overall, it’s a hell of a total package, and we look professional to our employees. The only thing I deal with is hiring and performance reviews. The rest is theirs. It’s very, very cost-effective. In my mind, even if I were still with a large company, there is no question that this would be the only way to go.”
April 1998 Small Business Times, Milwaukee
Cudahy to be honored as innovator and philanthropist
Michael Cudahy will receive the 2005 Headliner Award at the Milwaukee Press Club’s Gridiron and Awards Dinner on Saturday, May 7. The award is given annually to a person who is making a positive impact on the community.
Cudahy has contributed to the community as an inventor, entrepreneur, philanthropist and activist.
“We’re pleased to recognize Mr. Cudahy for his many years of service to the community,” said Roger Stafford, president of the Milwaukee Press Club. “Few individuals have given the financial and leadership support he has given to the cultural life of Milwaukee.”
Cudahy, 81, is the current president of The Endeavors Group LLC. He is the retired former chairman and chief executive officer of Marquette Medical Systems Inc., a Milwaukee company he founded in 1965 that has since become a division of GE Healthcare.
In recent years, Cudahy redeveloped the Pabst Theater in Milwaukee and is currently leading the development of the Discovery World at Pier Wisconsin on the city’s lakefront.
His philanthropical legacy is already cast in stone, as he serves on the boards of the Pabst Theater, the YMCA of Metropolitan Milwaukee, the Milwaukee Art Museum, the Greater Milwaukee Committee for Community Development, the Milwaukee Symphony Orchestra, the St. Ann Center for Intergenerational Care, the Wisconsin Conservatory of Music and other organizations.
Discovery World at Pier Wisconsin will become an educational resource for freshwater exploration and preservation unlike any other in North America, Cudahy said.
The project is the latest chapter of the Cudahy family odyssey that began when Michael’s grandfather, Patrick Cudahy, immigrated at the age of 3 months with his parents from the potato famine of Ireland to Boston, Mass., in 1849.
“The Irish were not welcome in Boston at that moment of American history. Signs posted in business places said, ‘Help wanted. Irish need not apply,’ an early bit of discrimination in America, perhaps brought on by the British in Boston or the disorderly conduct of some of the many Irish,” Michael Cudahy wrote in his autobiography, “Joyworks.”
Of course, Patrick eventually acquired ownership in a local meatpacking plant, which grew to become Patrick Cudahy Inc. in Cudahy.
Patrick’s ownership in the company was passed along to Michael’s uncle, the eldest son, in accordance with Irish tradition.
Michael’s father, John C. Cudahy, went his own way, earning a law degree at the University of Wisconsin before launching a career of political activism. John C. Cudahy was named by President Franklin D. Roosevelt to be the American ambassador to Poland, Ireland and Belgium.
The Gridiron and Awards Dinner will take place at the Wyndham Milwaukee Center Hotel, 139 E. Kilbourn Ave. The dinner will honor the winners of the 75th annual Excellence in Wisconsin Journalism and Collegiate Competition.
The Press Club’s annual Sacred Cat Award for outstanding achievement in journalism will be presented at the dinner to William L. Allen, recently retired editor-in-chief of National Geographic magazine.
At the dinner, Allen will share his experiences and viewpoints cultivated from a 25-year career of traveling around the world.
The emcee of this year’s Gridiron and Awards Dinner will be Caroline Lyders, morning co-anchor at WISN-TV Channel 12. Milwaukee futurist David Zach will serve as the guest commentator at the dinner.
The public is invited to attend the dinner. For more information, visit www.milwaukeepressclub.org or call Gloria Gappa-Grundeman at (414) 588-9571.
April 29, 2005, Small Business Times, Milwaukee, WI
Servant leadership
Question:
I read your article in the Feb. 4 issue of Small Business Times, and it got me thinking about what makes a workplace a more employee-centered “place to be.” I feel that much of what you talked about rang true for me. But as I look back on jobs I have liked or not liked, one of the most important factors for me is what the company’s image is in the community. Are they seen as supportive of the community? Are they linked to programs and/or projects that are improving the quality of life for residents in the community? Are they giving back?
I also know from years of nonprofit experience, that work environments that support employees (whether it is allowing them to volunteer on boards or committees or just letting them sell Girl Scout cookies in the lunchroom) with their efforts to be a part of making the community a better place to work and live, are viewed in a more positive light.
As a member of a nonprofit who has benefited by these “grassroots” employee-driven programs and projects, and as a professional who has the pleasure of working with employee volunteer representatives, I think this type of team building and development tool is often overlooked, yet it is an important part of employee satisfaction. These programs/projects often teach them leadership and project management skills they may not have received in the workplace.
What do you think?
Answer:
The concept of “servant leadership” is at the heart of what you are describing. Most researchers acknowledge Robert Greenleaf as the person who originated this approach. He wrote a book on the topic about 30 years ago. Underlying this leadership philosophy is the belief that the most effective leader is the one who serves the people. Implicit in this approach is the belief that leaders define success by the impact their actions have on others. Helping people become all that they can be becomes an overriding objective rather than solely focusing on the bottom line.
In order to accomplish this end, servant leaders:
–Serve the needs of organization members.
–Meet the needs of those they lead.
–Develop employees to the fullest.
–Coach others.
–Facilitate personal growth in all who work with them.
–Listen and build a sense
of community.
As you can see, this is a fairly radical departure from the typical concept of what leaders are supposed to do (i.e., lead). Servant leaders seek first to serve by addressing the needs of their followers. Because of this, some researchers have called servant leaders, virtuous leaders – individuals who focus on leading others with a focus on moral character, doing the right thing, etc. Recent years have seen a resurgence in the focus on values, principles, doing well by others, etc., and this helps explain why we are hearing more about servant leadership these days.
Generally speaking, researchers who have examined servant leadership suggest that the following attributes are the foundation for this approach:
–Humility – Servant leaders are humble and open to the criticism
of others.
–Altruism – Servant leaders strive to better the common good.
–Vision – Servant leaders challenge their followers to serve the needs of the constituents and to stay focused on achieving the desired end.
–Trust – Servant leaders create open environments and encourage others to get –Empowerment – Servant leaders give their power to their people. They turn them loose to pursue their goals with maximum autonomy.
–Service – Service is at the heart of servant leadership. Servant leaders focus their energies to the fullest on meeting the needs of others.
It is worth noting that servant leadership is applicable to any organizational setting. It is interesting to me, though, that you mention your background in the nonprofit sector. In many instances, nonprofit organizations have practiced servant leadership without thinking about it. That’s simply the way the organization has operated. In this regard, nonprofit organizations have outpaced many for-profit organizations whose focus has been solely on the bottom line.
What is to be gained by examining servant leadership or studying those organizations that employ it? Why should organizations pursue servant leadership? I think you make a strong case for it in your question when you highlight the impact that service-oriented leaders and employees have on the community. Frankly, the building of community, whether it be at work or away from work is central to the concept of servant leadership.
And, by turning attention to community, we turn attention to what I like to call the “other bottom line” – corporate culture. There are many definitions of corporate culture, ranging from the simple (e.g., “The way we do things around here”) to the complex (e.g., “The shared and relatively enduring pattern of basic values, beliefs and assumptions in an organization”). Suffice to say that when we are talking about corporate culture, we are talking about how the business does business – the words it uses, the messages it sends, the behavior it expects, etc.
A corporate culture that is guided and affected by servant leadership is going to be much different than one that is guided and affected by the use of a single criterion for success (i.e., maximum monetary profit). You illustrate this beautifully in your question.
One servant leader with whom I am familiar has gone so far as to draw an organizational chart in which the employees are at the center. As the president of the company, he believes his principal purpose is to make sure his people have what they need to meet their goals. If this means that he must fill in on the frontline so that one of his employees can make it to his or her child’s concert, baseball game, etc., his response is, “No problem. That’s what I’m here for.” His people are loyal and extremely committed to him and the company. He and his people have, in essence, built a sense of community within the company.
Want to build a sense of community? Then, start practicing servant leadership.
Daniel Schroeder, Ph.D., of Organization Development Consultants Inc. (ODC) in Brookfield provides “HR Connection.” Small Business Times readers who would like to see an issue addressed in an article may reach him at (262) 827-1901, via fax at
(262) 827-8383, via e-mail at
schroeder@odcons.com or via the
internet at www.odcons.com
April 29, 2005, Small Business Times, Milwaukee, WI
Oak Creek is Microcosm of Unfair Trade Policies
Commentary: by Steve Jagler of SBT
The news that Delphi Corp. intends to close its two Oak Creek plants and eliminate about 1,000 United Auto Workers jobs isn’t exactly a wake-up call. After all, America has been hitting the snooze alarm for some time now.
We all know the up side to free markets and global trading: We get to buy $45 bicycles and the like at Wal-Mart.
However, this equation also has an ever-expanding dark side, and Oak Creek’s predicament is a microcosm of that dark side. Gone will be hundreds of family-supporting jobs. Jobs that not only paid living wages, but provided health care benefits and vacations. In turn, those workers went out and spent their hard-earned money, buying vehicles, boats, televisions, computers and myriad other items. In effect, that money supported other jobs and businesses in the region.
What came around went around.
When I was growing up in Oak Creek, I knew dozens of friends whose parents worked at the Delphi plant. Those parents got up every morning and went to work. In return, they were able to make a living that enabled them to send their children to college or maybe buy a cottage up north.
They were living the middle class American dream. If they worked hard, they were rewarded for it, and they could even afford a comfortable retirement with a pension.
Today, that dream is eroding from the outside in.
Just beyond the gates of the Delphi plant, Oak Creek’s Howell Avenue has become a generic, neon, retail strip mall. Most of the stores and restaurants pay wages that do not support families. Most do not provide health benefits to their employees.
Consider this: More than 40 percent of the enrollees in Badger Care, Wisconsin’s health care benefits program for the working poor, are employees of Wal-Mart. Think about that for a moment. Small businesses are paying taxes to cover the health care costs of Wal-Mart employees.
Many businesspeople have been throwing up their hands in resignation and saying, "Well, what are you going to do? We’re for free trading."
Former President Ronald Reagan was in favor of free trading, too. However, Reagan understood that "free" trading doesn’t really happen without "fair" trading. He demanded that foreign markets stop undercutting the American dollar. Before other countries could have access to American markets, he demanded concessions in return. Such concessions resulted in Toyota building several automotive plants in the United States, where they hired American workers.
In his weekly radio address on Sept. 7, 1985, Reagan said, "I’m committed to and will continue to fight for fair trade. American exporters and American workers deserve a fair shake abroad, and we intend to see they get it."
The laissez-faire, weak-kneed resignation that the United States is powerless to demand trade concessions from other countries seeking access to our lucrative society started en masse during the Clinton administration and accelerated during the Bush administration. These policies have resulted in a record national trading deficit.
When people question these policies, they’re accused of being protectionist or isolationist.
Poppycock. This is not an either/or equation. Let us hope we’re done hitting the snooze button. The future of the American middle class is at stake. In the end, we are all in this together. After all, if the middle class dies, who is going to buy your company’s goods or services?
Firstlogic launches new data user forum
Firstlogic, Inc., a La Crosse-based global provider of enterprise information quality solutions, today announced the formation of a Federal User Group to serve Firstlogic federal customers and business partners. The new initiative creates a forum for customers to share data quality best practices, identify similarities in technical requirements and solution deployments. The inaugural meeting of the Firstlogic Federal User Group will take place Thursday, March 31, at the Crystal City Marriott at Reagan National Airport in Arlington, Va. Agenda items include a training track on advanced matching techniques and a question and answer session with Firstlogic’s federal, project management, development and professional services teams. Firstlogic also announced that Jim Young, a staff consultant with EWSolutions, has been named the chairman of the user group. For more information on the Firstlogic Federal User Group meeting and to register for the event, visit http://www.firstlogic.com/federal.
Manufacturing a rebound
The Milwaukee industrial real estate market is in better shape than most other metropolitan areas in the country and is poised for a rebound this year, according to new reports by Colliers International and Integra Realty Resources Inc. The Milwaukee area had an industrial space vacancy rate of 7.1 percent by the end of 2004, according to the Colliers report. The report predicts vacancies will decrease, absorption will increase and rents will increase for Milwaukee-area industrial real estate during the first part of this year.
The national industrial space vacancy rate was 9.5 percent at the end of 2004, according to the Colliers report. Milwaukee had the 10th-lowest vacancy rate of the 54 metropolitan areas listed in the report.
"This is very good news for Milwaukee," said James Barry III, president of James T. Barry Co. Inc./Colliers International in Milwaukee. "Our diversified economic base is starting to come back."
In the Integra report, Milwaukee had a 7.57 percent industrial space vacancy rate, compared with the national average of 11.42 percent. In that report, Milwaukee had the seventh-lowest industrial space vacancy rate of 51 metropolitan areas. The report also says the Milwaukee industrial real estate market is nearing the end of a recovery cycle and is about to enter an expansion period.
"Anecdotally, we are seeing a lot of activity," Barry said. "Manufacturing people are looking for crane space. People are looking for rail access. We haven’t seen that in a while."
Milwaukee’s industrial space vacancy rate is lower than most other metro areas in the Midwest, according to the reports. At the end of 2004, Chicago had a 9.5 percent vacancy rate, Cleveland was at 10.1 percent, Detroit was at 13 percent, Minneapolis was at 14.8 percent and Indianapolis was at 8.8 percent.
Some Milwaukee area-industrial real estate brokers predicted vacancy rates would fall this year as the economy continues to recover and the local industrial companies that were strong enough to survive the last recession continue to grow and expand.
"From 2000 to 2004, the vacancy rate went up to about 9 percent at the worst, then it steadily started coming back," Barry said. "I think a lot of these companies have tried very hard to make do with what they have. There is an increasing need for manufacturing and warehouse space. What they are still very reluctant to do is hire people."
Vacancy rates for industrial space in Milwaukee are lower than most other markets in large part because this area had less speculative industrial space built prior to the recession, Barry said.
"We started out with very little speculative space compared to other markets," he said. "Unlike a lot of other cities, like Chicago, where capital went flying in and a lot of space has been built, slowly, we’ve been absorbing space the last few years."
Another factor is that some obsolete industrial buildings, such as the former Allis Chalmers complex in West Allis and old warehouses in Milwaukee’s Historic Third Ward, that were previously vacant, are being been converted to other uses such as office space or condominium space.
The Milwaukee area has a shortage of available industrial sites, Barry said. If industrial vacancy rates drop to about 5 percent, development of new industrial parks could pick up, he said.
However, developers will have difficulty finding large sites for new industrial parks with access to most of the labor force, Barry said. As a result, some obsolete industrial buildings could be torn down to clear space for new industrial development, he said.
Such development could eventually occur in Milwaukee’s Menomonee River Valley, Barry said.
Industrial space vacancy rates in the Milwaukee area should continue to decline this year, Barry said, which will result in increasing lease rates and more speculative development of industrial space.
"Barring a calamity, I would predict going into 2005 and 2006, we will be at a level of (industrial real estate) activity equal to 1999 or 2000," Barry said. "I wouldn’t say we’re there yet, but it will steadily be up there in 2005."
The Colliers and Integra reports give differing views of the Milwaukee area office market.
The Integra report says the Milwaukee area office market is in the later stages of a recession. Intregra says downtown Milwaukee has a 14.7 percent office space vacancy rate, compared with the national average of 16.22, and a suburban office space vacancy rate of 18.68 percent, compared with the national average of 16.19 percent.
"The office market is stagnant," Barry said. "But some of the other cities have vacancies in the 20s. Milwaukee is quite a bit lower than that.
"The office market is probably going to come back and be OK," Barry said. "We’ll probably see a new office tower built (downtown), and the musical chairs (of tenants) will continue. Space will be absorbed slowly."
The Colliers report says Milwaukee had a downtown office vacancy rate of 9.8 percent, compared with the national average of 14.6 percent, and a downtown class A office space vacancy rate of 12.9 percent, compared with the national average of 14 percent, by the end of 2004.
The reports says Milwaukee had a suburban office space vacancy rate of 8.4 percent, compared with the national average of 15.8 percent, and a suburban class A office space vacancy rate of 14.3 percent, compared with the national average of 16.5 percent, by the end of 2004.
Barry plans to eventually build a mixed-use structure on a 25,000-square-foot parking lot his company owns along the east side of the Milwaukee River between Knapp Street and Juneau Avenue.
"We’re considering it," Barry said. "I think we’re trying to think about what the potential mixture should be between office, retail and residential. I’m a bit concerned about office going into this market."
Barry plans to move his company’s offices to the new building, when it is built, and then eventually redevelop the site of the company’s current office building located at 1232 N. Edison St., across the street from the parking lot.
March, 4, 2005, Small Business Times, Milwaukee, WI
‘Back to the city’
It isn’t taking long for Aries Industries Inc. to grow into its new headquarters. When Aries, which manufactures robot-mounted cameras and support equipment for sewer and pipeline inspection, relocated from Sussex to downtown Waukesha last year, the company added about 15 new employees and continued its trend of double-digit annual growth.
In December 2003, Aries bought its new 80,000-square-foot headquarters at 550 Elizabeth St., Waukesha, a few blocks west of Carroll College. The purchase and redevelopment of the facility, built near the turn of the century, cost about $3 million.
Aries had been housed in leased space in Sussex since the company was founded in 1985. The company had expanded its space in Sussex to about 40,000 square feet, but ran out of room to grow, said James Lenahan, president and chief executive officer of Aries.
The company had virtually no choice but to move from its former operations center last July, Lenahan said, because the firm did not own the building and lacked the ability to add more space there.
"We were at the point where if we wanted to grow, we needed to move," Lenahan said. "It took us a year and a half to find what we were looking for."
Aries has continued to grow since the move. The firm had 85 to 90 employees when the company purchased the new building and has about 105 employees today. Lenahan said the company will likely add three to five new employees in 2005.
He estimated Aries’ revenues for 2004 were in the "mid-$20 millions," approximately 18 percent over 2003. Lenahan said the company has projected double-digit growth for 2005.
"We’re optimistic about the year," he said. "We’re well-positioned in the industry to see continued growth into the future."
Lenahan said he learned about the building his company purchased through his involvement with the Waukesha County Economic Development Corp.’s visioning committee, which was asked to look at the county’s needs for manufacturing and commerce for the future.
"Over the next 10 to 15 years, it will be difficult to get employees to outlying factories," Lenahan said. "We said, ‘Let’s bring jobs back to the city, where people live and work.’ It’s been good for the city, the county and our employees. They’re close to banks, shops and restaurants. And it’s been good for us because there’s a larger employment pool."
Aries’ relocation was particularly good news for the City of Waukesha because of its choice of location, said Steve Crandell, director of community development for the city.
"It was more important as an infill for the city, bringing a successful business into the heart of the city," Crandell said. "It’s been a wonderful addition to the community."
Aries is currently using the first three floors of the building. Lenahan said future growth can be accommodated in floors located above the current operations, which are being used for storage now.
The basement houses the "clean" environment needed for electronic assembly, as well as Aries’ maintenance area, where robots and cameras are repaired. The first floor is split between assembly spaces for its remote-controlled robots and a large, 500-foot-long assembly line, where trucks, trailers and vans are outfitted with equipment needed for pipe and sewer inspection.
Lenahan said Aries’ customers, which include municipalities and contracts, don’t just purchase robots and cameras from the company, but an entire inspection system, including trucks, computers, controllers and all related equipment needed to inspect sewers and pipelines. Although the manufacturing facility and administration center is located in a residential neighborhood near downtown Waukesha, Lenahan said noise shouldn’t be a problem with neighbors.
"In the summertime, all the doors stay closed, because the whole line is air conditioned," he said.
The second and third floors house Aries’ sales and administration offices.
The building was constructed in 1909, Lenahan said. One of its first uses was for the manufacturing of Jiffy-Jell, a flavored gelatin that was the forerunner of Jell-O.
In recent years, the building housed a plastics injection molding company and several small manufacturers.
Redeveloping a property with a lengthy manufacturing history in Waukesha did present some challenges, such as transforming an old railroad depot into the manufacturing line for trucks, vans and trailers, and turning an old, dusty basement into spaces that house a training center and the clean environment for electronics assembly and the maintenance department.
However, the renovation project also revealed some hidden treasures, such as near-pristine hardwood floors on the third floor and a large safe left from the Jiffy-Jell days.
Lenahan said the fact that Aries’ building is listed on the National Register of Historic Places made it even more attractive to him.
"I wanted to preserve the beauty of it," Lenahan said. "And I love to save old buildings."
Aries was awarded with a 2004 Historic Preservation Award by the Wisconsin Historic Preservation Trust, recognizing the company’s restoration project.
Aries also was recognized during the 2004 Governor’s New Product Awards, presented by the Wisconsin Society of Professional Engineers, for its ThermalView camera. The camera takes infrared images of pipes to better identify potential cracks and leaks.
Lenahan said the award was a confirmation that Aries has been doing the right thing in spending about 3 percent of its sales profits on research and development.
"That’s an important number," Lenahan said. "We’re constantly striving for new products, looking to the future. We have listening groups within our customers and our industry. We’re constantly developing new products – we respond to the market’s needs. And that keeps us in the forefront of good profitability."
Aries Industries Inc.
Location: 550 Elizabeth St., Waukesha
2004 revenues:
More than $20 million
Product: Television inspection equipment for pipelines, including remote-controlled robots and support vehicles
web site: www.ariesindustries.com
February 18, 2005, Small Business Times, Milwaukee, WI
Corporate wellness
The recent withdrawal of Vioxx, a popular painkiller used for treatment of arthritis, has created a flurry of attention focused on the use and safety of prescription drugs. In September, Merck & Co. voluntarily removed Vioxx from the market because it was found to increase risk of heart attack.
An estimated 20 million people have taken Vioxx since the drug was launched in 1999. The number of injured patients is estimated to be from 30,000 to 100,000, resulting in what will most likely be one of the biggest litigation issues in the pharmaceutical industry. Concerns have also been raised about Celebrex, another medication in the same class of Cox-2 inhibitor drugs.
What has followed is a barrage of media coverage and public concern about the cost, safety and effect of prescription drugs. Is all of this activity a backlash against the pharmaceutical industry, or is there a growing trend by Americans to consider less costly, less risky and safer options to drugs?
Prescription drugs continue to be the fastest-growing area of health cost in America. Drug purchases in 2004 topped $216 billion. This was an increase of 11.5 percent from the previous year. Data from one large Milwaukee health plan shows that if you are an employer with 2,000 employees and dependents, you can expect that 1,700 people will use their prescription benefit an average of 11 times.
The United States leads the world in the development of new drugs, and yet America ranks 29th in life expectancy. While these drugs have a valued impact on quality of health, millions of Americans see pills as a solution for everything from weight gain to sadness. We have become a quick-fix society. Most of us have an expectation that when we see our physician with a health concern, we will leave with a diagnosis and a pill to solve the problem.
Despite the fortune spent on medicine in the United States, very little money is spent to treat the causes of chronic diseases before major illnesses develop. The Center for Disease Control reports that 54 percent of heart disease, 37 percent of cancer, 50 percent of cerebrovascular disease (strokes) and 49 percent of arteriosclerosis (hardening of the arteries) is preventable through lifestyle modification.
The increased incidence of disease resulting from unhealthy lifestyles, including obesity, poor nutrition and lack of physical fitness, coupled with the $2.5 billion spent annually on consumer advertising, prompt the demand for more drugs.
However, people increasingly are saying no to pills and seeking other options.
Patty Heying, a registered nurse and independent contractor, did exactly that with great results. Following a diagnosis of hypertension and high cholesterol, the 42-year-old Heying declined her physician’s recommendation for prescription medication until she could try natural options first. Through diet, increased exercise, natural supplements, stress management and use of therapeutic grade essential oils, she successfully reduced her blood pressure and cholesterol.
Within eight months, in a follow-up visit to her physician, her blood pressure returned to normal and her cholesterol fell from 278 to 202. She has continued to keep her blood pressure and cholesterol within normal range.
However, Heying would tell you that avoiding prescription drugs isn’t as simple as making a decision to stop taking them. When she recently applied to a local health plan for individual insurance, she was denied coverage for not seeking follow-up treatment for her hypertension and elevated cholesterol. When she received a letter of rejection, she called the health plan underwriting department and was told that the use of prescription medication would have indicated appropriate follow-up treatment.
The irony of our health insurance system is that it rewards people for taking drugs but limits payment for nutrition counseling and health club memberships. Even if you are conscientious about the overuse of prescription medication, you will get little encouragement from the health care system. Patient compliance is too often defined as being obedient about getting your prescription filled.
Has the system given up on the health care consumer’s ability for self care? It is a well-established medical fact that diet and exercise are significant factors in reducing coronary artery disease, but unfortunately, many doctors still do not spend significant time on prevention. Yet, can you blame physicians for reaching their limit with human nature? Most people will ask for and expect the easiest, quickest solution. Generally, that is a pill.
What does the removal of Vioxx and concerns about the drug category mean for the millions who suffer from arthritic pain? What options do patients and physicians have? Patients who are currently taking Vioxx should contact their health care providers to discuss discontinuing use of the drug and possible alternative treatments, such as weight control, exercise, massage, dietary supplements, relaxation techniques and acupuncture.
For arthritis sufferers, such alternative treatments can provide relief for many patients. For instance, some studies show that the omega-3 fats in fish oil, flax seed and walnuts may have an anti-inflammatory and analgesic effect on arthritic pain. Another supplement that is popular for ease of arthritis and muscle/joint pain is glycosamine-chondroitin. It is currently the focus of a large study by the National Institutes of Health. Since dietary supplements are another form of medication, they should be used with caution.
Connie Roethel, R.N., M.S.H., is president of Complementary Health & Healing Partners (CHHP), a corporate wellness and health promotion services company with offices in Mequon. She can be reached at (262) 241-9947.
February 18, 2005, Small Business Times, Milwaukee, WI
