Milwaukee Biz Blog

The Wisconsin Economic Development Corp. (WEDC) recently made a $750,000 investment in the Water Research and Business Accelerator Center in Milwaukee. This investment in the water technology research and business incubator is a prime example of WEDC’s new target industry investment strategy.

WEDC’s approach is innovative and a more effective approach to target industry advancement than traditional approaches. 

Traditional cluster strategies use statistical data to identify concentrations of like-coded companies, or identify the next “hot” industry sector and declare these as target industries, regardless of actual industry support or realistic opportunity.  WEDC’s targeted industry approach delivers customized solutions to accelerate business consortia that exhibits strong industry leadership, has a defined plan for growth and has realistic potential for strong and long-term economic impact. 

This new targeted-industry investment strategy by WEDC has a number of advantages.  First, it is not government picking winners or losers but a market-led strategy that accelerates already promising opportunities. Second, it does not apply a one-size fits all solution but provides an approach tailored to the consortia needs. Third, it maximizes the impact of taxpayer dollars by co-investing in solutions that are likely to yield the best results.  For example, WEDC also supports the trucking consortia’s efforts to increase the number of truck drivers and diesel mechanics by coordinating WEDC, Department of Workforce Development, and technical college solutions.  

Wisconsin is fortunate to have a number of existing and emerging consortia opportunities to drive regional and statewide job growth. Many of these are part of our strong manufacturing base – an industry characterized by export, strong job multipliers, and high R & D investment. Industry sectors such as water technology, defense vehicle manufacturing, energy storage and biotechnology-related equipment and processes also hold promise for growth. These sectors provide economic diversity and support quality jobs throughout the state.

Here’s why Wisconsin’s water technology industry is a target industry worthy of support. It has strong industry leadership through the Milwaukee Water Council; a concentration of key globally competitive businesses in Wisconsin; and the strong support of local and state resources.
WEDC’s investment to underwrite the rent of start-up water research and technology companies at the Accelerator Center is a unique solution designed to move the entrepreneur from the start-up and research and development stages to the product development and marketing stages. Our customized industry support doesn’t stop there. WEDC will expand water technology growth through exports by hosting a trade mission to India, April 22-May 1, 2012.

WEDC’s identification and investment in the water technology cluster is an example of WEDC’s new, innovative, market-pull approach to target industry growth in the state.  This approach will accelerate the growth of more industry-led consortia in Wisconsin. 

Paul Jadin is the CEO of the Wisconsin Economic Development Corp. (WEDC).

Everyone has been buzzing this week about the big national Super Bowl commercials, from the cute dogs and major celebrity endorsements to the laugh-out-loud babies and funny kids.

There are hundreds of websites and blogs measuring the various campaign successes. Social media continues the buzz with conversations and social syndication: rebroadcasting and linking to commercials on YouTube, Blogs, Twitter and Facebook.

However, did anyone happen to notice the three local Milwaukee ads that were sandwiched in-between the $3.5 million dollar national spots before half-time?

Don’t you recall that non-descript actor in a television and appliance sales ad or the voiceover selling some tools for a local hardware store chain? Surely you remember the cellular phone guy on a couch whining that he doesn’t get rewards from his provider?

These commercials were part of a small series of local ad blocks shown between the local NBC/TMJ4 News bumpers. Did anyone even notice these ads?  Is anyone talking about them? (Other than the fact that it was such a huge missed opportunity on so many levels).

These companies could have really done some amazing things to stand out and show off their brands as well as some of the local advertising and marketing talent Wisconsin has to offer. 

The core problem is that these commercials seemed to be an afterthought, as if they were plucked from a generic Tuesday afternoon lineup. Call up any Wisconsin production agency, digital creative house or independent media professional and they would have given their right arm for a chance to produce, develop or even collaborate on a local market Super Bowl commercial.

Shockingly to the companies who paid for the spots, the creative professionals probably would have all done all the work for free! What agency or professional wouldn’t want a Super Bowl commercial as part of their creative portfolio?

The detractors will say that the commercials were only seen in a smaller, local market, so why bother? Given the reach and power of social media, local is now global — depending on how good your ad is in the first place.
Ironically, Old Milwaukee ran a local commercial featuring Will Ferrell. It was only seen in one regional market with 15,180 households: North Platte, Neb. Business Week reports that the 52-second commercial has gotten more Twitter attention than Cadillac, Lexus and Century21 who all ran the expensive national spots. Now that is powerful exposure and buzz you can take to the bank!

William Caraher is a corporate chief information officer and a part-time, adjunct professor at Marquette University; teaching real-time social media marketing to graduate MBA students.  His thoughts and musings here are his own and not reflective or representative of his employers. He can be followed on Twitter at @WilliamCaraher.

Jaws dropped when the supporters of the recall against Gov. Scott Walker recently submitted more than 1 million signatures of Wisconsin residents.

Then jaws dropped again when Walker’s campaign announced a few days later it had raised more than $4.5 million in the most recent reporting period from a total of 21,443 contributions.

State law allows candidates who are targets of recalls to raise unlimited cash while the signatures are being gathered. Walker seized the moment, making a series of out-of-state fundraising appearances during the 60-day window.

“Gov. Walker's message of moving Wisconsin forward continues to resonate with voters,” said Ciara Matthews, communications director of the Walker campaign. “It is this message, and the success of the governor's reforms, that have inspired people to contribute to his campaign in overwhelming numbers. These donations will allow us to fight back against this baseless recall and ensure Gov. Walker can continue to lay the foundation for a more successful Wisconsin and keep government working on the side of taxpayers.”

The Walker campaign finished the quarter with a combined total of more than $2.6 million cash on hand in the recall and general campaign funds. The campaign has raised more than $12 million since Jan. 1, 2011. According to the campaign, 16,406 of those contributions were $50 or less, representing 76.5 percent of the overall number of contributions.

A quick review of the Walker donations reported to the Government Accountability Board shows strong support from prominent Wisconsin business executives (name, company and city of residence): John Bergstrom of Bergstrom Automotive, Neenah, $2,500; Frederick Boelter of The Boelter Companies, Hartland, $2,500; John Burke of Burke Properties, Fox Point, $10,000; Jere Fabick of Fabco Equipment, Oconomowoc, $50,000; Gerald Frye of The Benefit Services Group Inc., Elm Grove, $5,000; Robert Greenheck of Greenheck Fan Corp., Schofield, $7,500; William Haack of Zywave, Elm Grove, $8,000; Thomas Halquist of Halquist Stone Company, Menomonee Falls, $2,500; Harvey Hammond of HNTB Corp., Mequon, $5,000; Emery Harlan of Gonzalez, Saggio & Harland LLP, $5.000; Robert Hillis of Direct Supply Inc., Milwaukee, $10,000; Chris Kappl of Wildwood Reserve LLC, Menomonee Falls; Ted Kellner of Fiduciary Management, Mequon, $8,564.84; Dennis Klein, KBS Construction, Milwaukee, $10,000; Richard Klein of Aurora Health Care, Brookfield, $10,000; Herbert Kohler of Kohler Company, Kohler, $8,000; James Leef of ITU Inc., Brookfield, $4,000; Fred Luber of Super Steel Products Corp., Milwaukee, $2,000; Glenn Madrigrano of CJW Inc., Kenosha, $2,500; Michael Mahoney of Park Bank, Mequon, $2,000; Daniel McKeithan of Tamarack Petroleum Company, Milwaukee, $20,000; John Mellowes of Charter Manufacturing Co. Inc., Mequon, $10,000; Mark Neumann of Neumann Homes Inc., Nashotah, $2,500; Albert Nicholas of Nicholas Company Inc., Hartland, $25,000; Eric Peter of Jax Inc., Elm Grove, $2,500; Thomas Quadracci of Quad/Graphics Inc., Hartland, $2,000; V. Ross Read III, Clement Finance & Leasing Inc., Milwaukee; Roy Reiman (retired) of Reiman Publications, $10,000; Steve Ristow of Schneider Excavating, Lannon, $2,500; Michael White of Rite-Hite Holding Corp., River Hills, $16,700; Richard Wiederhold of Managed Health Services, Elm Grove, $2,000; and James Wigdale (retired) of Marshall & Ilsley Corp., Fox Point, $3,000.

A Wisconsin Democracy Campaign analysis of the individual Walker contributions reported in the latest campaign finance report shows that 61 percent came from outside Wisconsin. Nearly $2.3 million of the $4.5 million raised came from just 33 donors.

The largest out-of-state donations included: $250,000 each from Sarah Atkins and David Humphries of Tamko Building Products in Joplin, Mo.; $250,000 from Stanley Herzog of Herzog Companies Inc. in St. Joseph, Mo.; $250,000 from Bob J. Perry of Perry Homes in Houston, Texas; and $100,000 from Bruce Kovner of Caxton Alternative Management LP in New York City.

Perry was the financier of the infamous “Swift Boat” ads against 2004 Democratic presidential nominee John Kerry.

The political action committee (PAC) of the Metropolitan Milwaukee Association of Commerce donated $150,000 to Walker’s campaign on Dec. 16 and another $25,000 on Jan. 2.

“Gov. Scott Walker is traveling across America selling out Wisconsin to the highest bidder,” said Scot Ross, executive director of One Wisconsin Now, one of the groups working to recall Walker. “No wonder Walker doesn’t have time to try and stop the six straight months of job loss. Traveling across the country to raise money is his day job, being governor is just his hobby at this point.”

- Steve Jagler is executive editor of BizTimes.

Who are they – the half million folks who signed recall Scott Walker petitions? What are their demographics, income levels, education, occupations? And, most importantly, what are their issues?
The Walker supporters would probably call us ignorant liberals, progressives, fools, and worse – but we are a diverse group of intelligent people. Here are some of our stories:

I recently chatted with Jeff, a married and employed attorney in Whitefish Bay. His specialties include negotiations and international practices, and his education includes Yale and Columbia Universities. He also holds a certification from the Parker School in foreign and comparative Law. He has been an advocacy chair for the American Diabetes Association of Wisconsin and donates pro-bono work with children. Jeff feels that Walker’s policies have divided the state as never before (i.e. Voter ID). Taking a cherished American freedom away from Americans is damaging. Changing voting rules is very costly, especially during a budget crisis, and unfair redistricting has enhanced Republican power.
Jeff, who is in his 50s, believes in the greater good for the community rather than the accumulation of material possessions. The lower 50 percent of the income level people would spend more if they had more and could pay more taxes. The wealthy are not really making jobs. Doyle’s budget had a $6.5B deficit which was resolved through successful bargaining (including collective bargaining).

Annie is a 68-year-old retired executive manager. She currently lives in Brown Deer but moved to Wisconsin in 1957. Her 50th wedding anniversary is this April. She has three successful children: an attorney, a teacher and a business manager. Her education includes Manpower Business Technical Institute with a focus on computer programming and the University of Wisconsin-Milwaukee with a focus on community education. She has tutored children around Milwaukee for years, teaching  math and reading.  According to Annie, the children worked hard because they wanted to get a job. She thinks Walker is harming these children and working families by cutting education funding and health care. She asked, “Is it true that Walker wants these children to die mentally and physically? He continues to give huge tax cuts to corporations sending jobs oversea. Walker is dishonest with the people.” She has worked very hard to get as many petition signatures possible to recall Scott Walker.

Bruce B. is a former flight instructor / charter pilot who is in his 50s and now retired. His education includes a B.A. in applied science-aviation. When I asked about his marital status, he replied, “I am single, not allowed to marry (gay).”  Bruce grew up in Wisconsin, left for a few years in the mid-70's (Arizona), then returned and has lived here since.
He claimed: “The issue that bothers me the most: Cutting Badger Care. “I have volunteered at free clinics in Milwaukee since 1978. Cutting  Badger Care will wipe out medical care to 64,000 Wisconsin residents, of which 25,000 are children.  Given my volunteer background, I can guarantee you that people will die. I suspect it will be mostly women and children, especially infants. Walker and the Republicans who voted to cut Badger Care know that people will die, but don't care. They think that balancing the budget is a higher priority than life itself. This concept cannot be Christian. Yet the governor holds "prayer breakfasts," and professes to all that he is a Christian. Jesus will judge him.”
Another issue that bothers Bruce:  “Cutting education funding by $800 million even as test scores of American students continue to decline, as compared to students in other countries.  We used to be #1 compared to the rest of the free world.  Now we are #25.  It is absurd to cut dollars for education now, with the argument that it will prevent raising taxes.”

Bruce’s other issues include the following:

• Rules, laws, compliance procedures, etc. that used to require a vote in the legislature and senate are now controlled solely by the governor.  He can also override a decision in any city, town or other community that he feels is not conducting issues "appropriately."  He can assign a person to go into any town, and take over the governing system there.  This is a dangerous precedent.
• Walker never mentioned his intent to bust the unions of collective bargaining during his campaign, and only support the unions who endorsed him.
• He has recently appealed to the federal government to allow Wisconsin to be exempt from Medicaid requirements.
• His financial support is from outside of Wisconsin. As an example, the Koch brothers. They gave him large donations during his campaign, and do so now as well.  They wish to buy utility firms that are now public utilities. Walker is now in the process of changing the laws to make that possible. The Koch brothers P.A.C., Americans For Prosperity, opened an office across the street from the State Capitol.
• There were fake candidates to force a recall primary. This is actually an issue that is connected to the Alberta Darling recall election, but it is a sleazy way to buy time, and I suspect Walker will do the same during the election process after the recall succeeds. It should be illegal. Yet, the Republicans have made it clear that they are proud of this tool.
• The voter I.D. law. Walker can claim that it is to prevent fraud, but I argue that it is meant to deny the Constitutionally protected rights of those who normally vote Democrat: The disenfranchised and poor, who are unable to advocate for themselves.
• Since he took office, Wisconsin has lost many jobs. He claims to be the job-maker. Yet, it turns out that Wisconsin residents lost more jobs in October and November, 2011, than any other state in the country.
   

Naomi  is a therapist and environmental educator who completed graduate school. She is married with three children and is a member of the 50+ crowd. She said the following: “The issues that really upset me are related to the idea that government, as a representation of the people, is an untrustworthy entity. Our collective resources of goods, energy, finances, talent, education, health care, etc., make for a stronger and healthier society. It is when our entire community is thriving that there is potential for collective happiness and good will. But human communities need help with this, and government is the only fair agent to distribute our resources to all members. I don’t understand how greed is okay, nor how we can continue to punish the poor with bad health care, bad schools, bad housing, and still be called a democratic free society. Granted, there are always some problems in government agencies, but not nearly  as corrupt as our current system.
“Governor Walker is trying to privatize Wisconsin, which means there is a private selection of who gets funding and for which projects. The for-profit entities are always trying to use the fewest employees on the cheapest terms. That is how China can pay very young laborers tiny wages for long hours of work. Wisconsin has a proud history of fighting for fair labor and conditions, good schools for all, parks and land preserved for the public. These are the products of the collective population, not the outcome of the select few controlling the resources. We depend upon our educators to bring the next generation to the world ready to read, write, think, plan, and be of good character. Teachers should be treated as professionals.”

These paragraphs could go on and on. We are a diverse group of intelligent thinkers who care about our state, our communities, and our friends and families. This is only a sample of who we are and what we want.

Doris Appelbaum is the founder, chief executive officer and president of Appelbaum’s Resume Professionals Inc. in Glendale.

We are turning things around.  We are heading in the right direction.  We are moving Wisconsin forward. 

In 2011, we added thousands of private sector jobs and the unemployment rate is down from a year ago.  In fact, it’s the lowest it has been since 2008. 

In the past, 150,000 of our fellow citizens lost their jobs in the private sector.  Two years ago, a mere 10 percent of our employers thought that Wisconsin was headed in the right direction. 

In contrast, we created a better environment for job creation in our state over the past year.  Now, 94 percent of our employers say Wisconsin is headed in the right direction.  A majority of those employers say that they plan on growing in 2012. 

To help small businesses continue to grow, our Wisconsin Working jobs plan helps connect job seekers to employers and to the skills that they need to fill those jobs.  Our initiatives have broad, bi-partisan support.   

To continue to grow our economy, we also needed to address the fiscal crisis we inherited.  Last January, Wisconsin faced a $3.6 billion budget deficit. 

We balanced that budget deficit.  Unlike other states, we did it without raising taxes, without massive layoffs and without budget tricks.  That allowed us to put more than $1.2 billion (one of the biggest increases in the country) into Medicaid to support programs that help needy families, children and seniors. 

Property taxpayers also benefited from our reforms.  For the five years prior to my talking office, the average school tax levy increased $220 million per year.  Our reforms led to the first decrease in the school property tax levy in six years.

We proved that we can have great schools and protect the taxpayers.  We just have to spend our money more wisely. 

In the past, schools were often forced to buy their health insurance from just one company.  Now, they can bid it out and school districts are saving millions. 

As the father of two students in a public high school in Wisconsin, I am thankful for our great schools and outstanding teachers.  That’s why I’m glad schools can now staff based on merit and pay based on performance.  That means we can put the best and the brightest in our classrooms, and we can keep them there. 

Looking ahead, we have a plan to improve reading in our state through our Read to Lead initiative.  We want to be certain that every child is reading early so they don’t ever feel that learning isn’t for them. 

We are also working with State Superintendent of Public Instruction Tony Evers on a system to hold schools and school districts accountable to educators, parents, employers and each community.  Our system will help replicate success and help fix problems.   

Overall, we are working hard to help the people of our state create more jobs, continue to balance our budget and make sure that every kid has access to a great education.  Working together, I know we can improve Wisconsin.

We made some tough decisions over the past year because I didn’t want to pass on a mess to my kids and others like them.  We thought more about the next generation than we did about the next election.  We kept our promises. 

Thankfully, we are turning things around and are heading in the right direction. Together, we will continue to move Wisconsin forward.

Scott Walker is the governor of Wisconsin.

If, as a company leader, you did not lose a heartbeat over the bankruptcy filing of Kodak, Barnes and Noble, Blockbuster and AMR Corporation (American Airline’s parent) or Google’s pending purchase of Motorola phones, you should have. When previously solid businesses run out of cash, there are lessons to be learned. In particular, never forget the vital strategic question, “What business are we in?”

Too narrow an answer, like Kodak’s “film” or Blockbuster’s “video store,” positions your business to be disrupted by a better solution. Look what stand-alone digital cameras and smart phones have done to film or what Netflix’s more convenient mail-order DVD model did to Blockbuster. A change in consumer preferences also leads to disruptions as Netflix found out with the surge in on-line media streaming.

Too broad an answer to the question “What business are we in?” or an out-of-touch-with-the-market answer is similarly fraught with problems. Sears failed in trying to sell soft goods like sheets and clothing alongside appliances and hardware. A new owner got it wrong again when he combined Sears with Kmart as a real estate play as a recession and the Internet’s disruption of retail created an abundance of space. Spectrum Brands erred in assuming synergies from combining a bunch of third-rate brands with Rayovac batteries would cover debt payments. Falling into the same trap by combining community newspapers, Lee Enterprises went belly-up.

Rapid consolidation in an industry indicates competitors have the same business definition and their business models are commoditized, as we saw in pharmaceuticals, banking and accounting and law firms. Smart leaders in these industries will ask, “How might I change my business concept and value promise to break out of the commodity pack?”

These industries aren’t alone. Many companies are being challenged by the definition of their business. In the age of Google and Wikipedia, what is the public library (or a teacher for that matter) today and why should it exist? What is a school textbook publisher in an iPad/Kindle on-line information age? What is a newspaper business in the era of free? How should health insurance companies redefine their business as policy changes?

Here are five principles to guide your search for an answer to the question, “What business are we really in?”
Never stop asking the question. Otherwise, you leave the answer to history, industry practices, your founder’s preferences or serendipity.  Leadership’s highest value contribution is to regularly reflect upon and define the company’s domain and build differentiated business models anchored in hard-to-copy advantages within this domain.

There are many ways to focus the answer. Apple’s domain appears to be defined around its value promise – saving time, increasing usefulness and reducing frustrations of computing. The value promise has taken Apple from computers to music players to cell phones to mobile computing, and soon TV and textbooks. IBM on the other hand defines its business around capabilities, moving from hardware to services.

Disrupt your business before competitors do or you’ll have your own Kodak moment. Kodak invented digital photography and e-mail photo sharing but did not aggressively pursue the market to preserve its lucrative film business. No customer will pay you merely to preserve your shareholder value, executive bonuses or privately owned company wealth.  If there is a better answer, your customers will head in that direction, and today they do so at a faster and faster clip.

Purpose matters more than mission.  Mission is about “what,” purpose about “why.” Purpose deals with beneficial outcomes, a more strategic business concept than a description of “what” you do. Kodak’s mission was to make the best film, but film’s deeper purpose is preserving memories (photography) and capturing images (healthcare and movies).  Adopting a broader definition of its business would have pointed Kodak to richer directions than the film-like business of printer ink cartridges that they later pursued.

Cost effectiveness wins the day. Competition drives business models towards the lowest possible cost.  It’s why the parent company of American Airlines had to declare bankruptcy. News organizations and catalogue companies that center their business models in print had best relearn Economics 101 as it is finally pertinent.

What business are you in? The answer is not in your boardroom, management team or your past.  Be curious and listen to a widely diversified set of external voices and inputs to keep your mind alert to new answers. You’ll help your company not only survive, but thrive.

Kay Plantes is an MIT-trained economist, business strategy consultant, columnist and author. She served as chief economist for former Wisconsin Republican Gov. Lee Dreyfus. Plantes provides expertise in business model innovation, strategic leadership and smart economic policies.

What does “care” make each of us think of? Health care? Care for infants or the elderly? One definition of the word is “painstaking or watchful attention.” If we want our businesses to thrive, it is critical to give this sort of attention to our employees.

For too long, corporate America has demonstrated too little care for employees, throwing it aside in favor of realizing efficiencies.  As an example, outsourcing overseas often dumbs down support services to the extent that employees left on American soil feel its corporate leaders only care about slashing costs. The U.S.-based employees are left to bear the brunt of problems generated by ill-fitted overseas service.  They clean up the problems, or worse, have no time to deal with them. When management doesn’t support them, they conclude no one cares. And when this happens, employee morale suffers and people shut down.  Trust starts to erode.

At the end of the day, if bosses don’t truly try to understand employees’ challenges or give them the latitude to fix problems, employees feel unappreciated and become less productive.

Small business owners have a huge advantage over large companies when it comes to showing employees their appreciation and providing support. And it doesn’t need to be an Employee of the Month program or other formal initiative.

Appreciation is embedded in bosses’ actions and words. It’s the way we genuinely thank a janitor for their hard work cleaning up after a staff party, the way we respond quickly when someone needs data to move their project forward, or the way we spend a few extra minutes to talk to a front-line person whose mother is ill.

When we take good care of individuals, it’s genuine, heart-felt, and personal. Our grandmother’s idea of showing appreciation wasn’t through a formal Grandchild Appreciation Day; she did this through baking cookies with us and listening intently as we stumbled through knock-knock jokes.

You can’t institutionalize caring. It’s done at a one-to-one level.

Caring is a behavior and skill set we all possess. Some of us have practiced it more than others over the years at work. Some bosses leave their personal, emotional side at the door.  This is a big mistake. Not only does it deprive a person of truly living in the moment, but it also deprives them of forming meaningful relationships. 

The next time we interact with an employee, we can engage them. We can find out what the person did over the weekend, ask their opinion on a new idea, or ask what we could do to make their work easier. If we connect with them, they’ll start to understand that we care.

There is an entire science behind caring.  In general, we relate to others when we not only see their emotions, but also experience those emotions ourselves. Our brains allow us to simulate what the other person is experiencing, so that we derive the same emotion.

The idea here isn’t to get involved in an employee’s life or accompany them in all their emotional ups and downs. The point is to let the employees know that we understand them, that we see them for who they are.  In the end, we all have a basic human need to be understood.

Other positive characteristics of a relationship can also emerge once a sense of caring is in place.  Caring leads to trust, trust leads to a sense of safety and loyalty, and these lead to a greater sense of ownership in the success of the business.

This joint sense of ownership is a critical element missing from today’s business world. Many employees worry about job security. A sense of vulnerability permeates today’s workforce and limits employees’ ability or desire to fully engage.

As owners and bosses, we understand this lack of security. While we can’t predict the future, we can honestly address employees’ anxiety head on. We can share sales projections, budget constraints, and prepare our employees for change. If we care, we can also get their input on possible alternative routes to navigate through tough times. Their perspective is valuable and they will appreciate the chance to demonstrate that they care. This care thing crops up everywhere once we start noticing it.

Painstaking or watchful attention is at the heart of every important endeavor we pursue. Golfers who try to improve their game can attest to this truth.  Homeowners who restore bungalows to highlight their best features practice this level of attention. The parts of our lives that flourish are the ones that we focus on the most.

It’s important to become aware of how we choose to partition our limited energy at work.

This art of caring is vital to the development of our employees and our relationships with them. When we take the extra time each day to demonstrate our genuine care, we strengthen our business, create a safer environment for our employees, and feel better about ourselves as decent human beings.

Julie O’Keeffe of Wauwatosa is a speaker, coach, author and owner of Next Step Goals LLC.

Everyone is entitled to their own opinions, but not their own facts.

Too many political types bloviate about the Bush and Obama bailouts during the 2008 subprime crisis. They claim it failed, didn’t work and cost us taxpayers a lot.

I beg to differ.

In late 2008, people stopped spending...Restaurants were empty. Shopping malls were abandoned. Businesses froze. It felt like lemmings charging over a cliff.

Wall Street was in panic. Market makers were compromised because many were out of business or did not have the capital to buy and sell securities- essential to making markets. Wachovia, Merill Lynch, among others went into “arranged marriages” without a dowry. Washington Mutual went under as did Lehman Brothers. Banks refused to take each other’s credits.

The Great Depression of 1929 is in our DNA and seemed real.

There were runs on money markets. Liquidity disappeared. Hedge funds abandoned Morgan Stanley and Merrill Lynch because they didn’t want to have their funds tied up and lost. Goldman Saks was about to collapse, as were Citigroup and BankAmerica.

I lived through this and found that there were no safe places to hide.

While I had predicted the sub-prime crisis in 2006 (and had alerted the Federal Reserve, numerous elected officials and the Milwaukee Journal-Sentinel and New York Times), I had not anticipated AIG’s fall or that corporate bonds would be hit as hard as they were.

Mr. Paulson and Mr. Bernecke panicked like the rest of us. They reacted by throwing a lot of stuff against the wall to see what stuck. Finally some of what they did did stick, and the worst of the panic subsided. Obama and his crew continued with programs to stabilize the markets and the banks and to save the auto business and their suppliers.

I mention what happened because we have short memories and because I want to set the stage for my belief that what both the Bush and Obama governments avoided a 1929-like depression.

But don’t take my word; look at the July 25, 2011, article in Fortune Magazine titled “Surprise! The Big Bad Bailout is Paying Off.”

Fortune Magazine is not a tool of Occupy Wall Street or Liberals. Like most business people, they need to look at the world objectively. Their research showed that the
bailouts were a success.

The Fortune article considered the entire bailout, not just the 3 percent TARP (Troubled Asset Relief Program). TARP cost $19 billion, including a $13 billion restructuring cost for homeowners that stabilized neighborhoods. TARP was authorized to spend $700 billion but never spent more that $410 billion.

The Treasury guaranteed money market funds when the largest such fund, Reserve Prime Fund, fell to .97 cent. In plain parlance, Reserve broke the buck. The Treasury stopped a run on these funds when they guaranteed $3 trillion.

Hedge funds ran for the doors when Lehman Brothers - one of the top “Prime Brokers” - went under and their assets were frozen. There was a run on Goldman Saks and Morgan Stanley - also “Prime Brokers” that was stemmed when the government made them “banks” so the Federal Reserve could loan them money. 

Merrill Lynch joined Bank of America in a shot-gun marriage as did Countrywide.

GE Capital couldn’t rollover its borrowings, a problem other large companies faced. The government became the lender of last resort for these firms. 

AIG through a British subsidiary guaranteed a lot of AAA-rated bad CMOs and other mortgage backed bonds. As the country’s largest insurer, they needed time to unravel their assets. The Treasury got 563 million shares of AIG for making $85 billion in credit available. These shares are worth about $14 billion.

Was it smart to pay Goldman Saks, one of the worst offenders in the subprime crisis 100 percent on the dollar? Probably not, but to allow AIG to go belly up would have had a negative affect on the economy in part because other insurance companies would have had to take over their policies and annuities and they did not have the capital to do so..

The most critical and largest expense was for Fannie Mae/Freddie Mac. Shareholders were wiped out, but debt holders (many of which were banks) were saved. The cost as of last summer was $130 billion ($154 billion, less a $24 billion dividend). The Congressional Budget Office and the Treasury, according to Fortune, expect this number to shrink.

There were many problems with these two organizations. Fannie Mae was for the Democrats and Freddie Mac was for the Republicans. The original idea was that they would be a clearinghouse for mortgages on the secondary market (something I advocated for more than four decades ago).

These two organizations then became quasi government-private companies, combining the worst that public and private offers. Management was rewarded for short-term performance so they manipulated the system to ensure that their numbers looked good. Both Fannie Mae & Freddie Mac were generous in their political contributions and lobbying. The function of these two organizations should not be privatized.
Fortune believes that the negative part of the bailout was a ruling that AIG, Citigroup, GM and Ally Financial (formerly GMAC) could use their tax losses in full and could shelter $35 billion in income. Of course, they need to earn money to shelter them.

The current “losses” in Chrysler, GM and AIG are offset by gains from the banks (who were anxious to pay off their debt so that their top executives would not have a ceiling on their compensation). These bailouts fell from $$411 billion to $104 billion Final judgment is still out on Chrysler, GM & AIG.

Imagine for the moment the damage to our economy and society if GM, Chrysler and AIG failed. The actual cost to the government and taxpayers for unemployment and other expenses would have been higher than the bailout.

On the “Plus” side, Fortune included “bailout” profits from the Federal Reserve.

The Federal Reserve bought $1.25 trillion of mortgage backed securities in QE1 
(2008-9) and $600 billion in QE2 (2010-11). The Federal Reserve owns about $2 trillion for which they did not have to borrow. In 2007-8, the Fed returned to the Treasury $193 billion (which Fortune calculates as $102 billion in excess “profit”). The size of this portfolio is falling slowly. The Fed should generate at least $30 billion in excess profits in 2012.

Treasury received $15 billion in fees for insuring money market balances and the $150 billion in the mortgage backed bonds it owns. And the FDIC made $8 billion between the increased fees on insured deposits and what it has paid out.

Fortune said that it was not the bailout that was bad, but the excesses of the financial system. Looked at objectively, this is obvious.
 
One reason for this success is that government has only had to make good on a fraction of its guaranteed loans. The Treasury also had advantageous deals with the banks that were profitable.

In the end, the taxpayers will end up whole or ahead. But the success of the bailout is that it prevented a depression-like situation like we had in 1929. It rescued GM and Chrysler and allowed Ford to survive because it saved the suppliers of the auto companies. It set up a situation where confidence in the banking system and money markets came back and where we could address the problems of our economy.

These are the facts. The rest is propaganda. As Sun Tzu said in The Art of War: “He who does not understand himself or his enemy is doomed to fall.” To understand how to prevent these problems from occurring in the future, we need to know what has been successful. The fear is that politicians and others will believe the lies they are telling others. 

That is a roadmap to disaster. For if we do not see what causes problems and what works, what have we learned?

Bob Chernow is a Milwaukee businessman, a former River Hills Trustee and the former chair of the Regional Telecommunications Commission, the North Shore Cable Commission and the Milwaukee River South Rivershed Commission.

For many users of the Internet, the online lobbying effort that blocked two “internet piracy” bills from whizzing through Congress was best summarized by the recent 24-hour blackout of the English-language version of Wikipedia.

For one day in late January, would-be users of the online encyclopedia were greeted with a message about why the “Stop Online Piracy Act” and the companion “Protect IP Act” would hamper creativity and threaten free speech.

“In short, these bills are efforts to stop copyright infringement by foreign web sites, but, in our opinion, they do so in a way that actually infringes free expression while harming the Internet,” read a message from Wikipedia.

That view, amplified by similar appeals on web sites as large as Google.com to tens of thousands of blogs to millions to Twitter messages, sidelined both pieces of legislation last week. The bills (S.968 and H.R. 3261) were backed primarily by the entertainment industry and may yet come back in an amended form.

Whatever happens next in Washington, however, won’t diminish the significance of the largest “e-lobbying” effort in the history of the Internet – or the commitment of its users to the principle of largely unfettered expression.

One of the uniquely American innovations of the last quarter century has been the Internet. It has been a model of innovation from the start and continues to be so, creating opportunity, companies and jobs for millions of Americans.

Of course, the Internet is not immune to manipulation. That is evidenced by the proliferation of rogue websites, most often established offshore, that are essentially dedicated to counterfeiting, copyright infringement and other criminal activities. That’s why the internet piracy bills were introduced.

Unfortunately, both overshot the mark. As written, they would have exposed law-abiding U.S. Internet and technology companies to uncertain liabilities, private rights of action and technology mandates that would hamper the historically free-flowing, innovative nature of the Internet itself.

The bills would have forced tech companies to pre-screen and monitor all user comments, pictures and videos – all but killing the burgeoning social media industry. In addition, they would have compelled all Internet search engines, ISPs, social networks and any website with a hyperlink to police all these links and could shut a website down that linked to any type of pirated content.

These bills would make it harder for young companies to grow, to attract investors and to generally operate in an environment that isn’t dampened by the constant threat of red tape and litigation. If you’re launching a new Internet company, the last thing you want to do is spend time fighting web-o-crats.

Congress already has at its disposal a better mechanism. The Digital Millennium Copyright Act of 1998 provides a safe harbor for Internet companies that act in good faith to remove infringing content from their sites. The DMCA is one of the big reasons companies such as Facebook, YouTube, and Twitter weren’t crushed in their early days by frivolous lawsuits. Existing law works for the vast majority of online companies.

That’s not to say pirating isn’t a serious problem. It can be addressed, however, in other ways that don’t disadvantage domestic Internet and technology companies that aspire to be fair, conscientious players.

Those include the Internet’s own self-policing functions. Internet governance is currently restricted to a non-profit, multinational body based in California. The Internet Corporation for Assigned Names and Numbers maintains a host of technical standards, which allows traffic to flow throughout the global communications network. ICANN is a private organization with an international board of directors, but there is already some oversight by Washington because it’s a U.S.-based corporation.

At an international conference on the Internet about six years ago, a member of then-President Bush’s administration said it well: “The Internet itself is not controlled by any single government; it is not controlled by any single person. It is a manifestation of the creativity and the genius of the world spirit… The promise of the Internet is not fulfilled by economic growth alone.  Its greater promise is the opportunity it offers to the people of every nation to pursue educational, cultural, political, medical, scientific and commercial achievements for the betterment of all.”

As last year’s Arab Spring protests and subsequent events have demonstrated, the Internet has become a foundation for 21st century democracy. While the Internet should be neither above nor below the law, Congress must take care not to undermine a platform rooted in the most exportable of American values – freedom of expression.

Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

 

Most business owners have some way of intuitively understanding how their company is doing. That insight could be based on any number of factors, including new orders, shipments, machine hours, labor activity, etc.

In effect, those are key performance indicators – information that owners and managers rely upon to keep their companies on track toward specific goals. As a company grows and the owner gets busier or as business conditions change, it’s important to formalize those indicators and develop a dashboard that exists outside the mind of the owner.
As we look toward 2012, now is the time to develop or revisit those factors that drive the business and ensure growth. Use the following suggestions to identify key performance indicators and develop your dashboard.
There are numerous financial and operational factors that can be viewed as key performance indicators, including: revenue; orders; time to ship; labor hours; machine hours; inventory runs; accounts receivable statistics; backlog; new customers acquired; staff turnover; returns; and working capital.

Each of those areas has subsets and circumstances unique to an industry and to a specific business within that industry. Key performance indicators should reflect a company’s goals and be quantifiable and actionable. The goals become the benchmark against which ongoing data is judged and responses considered. 

Along with company-wide key performance indicators, departments can have their own indicators based on their roles in reaching the company’s overall goals.

The structure that conveys key performance indicators can be in the form of written weekly activity reports or flash reports, spreadsheets, charts or some other numbers-based overview.

Dashboards offer quick review
While those forms are valuable, today’s technology offers an even quicker way for time-pressed executives to review current information – the computer screen dashboard. Like the dashboard on a car, a computer screen dashboard can offer company owners and managers a quick look at current business conditions, and allow them to make adjustments based on the numbers.

The best dashboards use graphic displays that allow the user to quickly grasp the situation and determine what steps could be taken in response to the information.
Like any business activity monitoring, dashboards can provide information tailored to the specific needs of a particular business or to replicate the data the business owner intuitively followed during a less formal stage of the company’s life.

Data is real-time
One of the great benefits of dashboards is that information is pushed to them from the underlying financial systems so data and charts that are displayed are always real-time.

A dashboard can relay financial statistics as well as information on activities and processes within the operation. Since the dashboards are intended for a quick overview, it’s best to select a limited number of key indicators that you find meaningful. In this case, less is better. Too much information can make dashboards overbearing and, over time, ignored.

Key performance indicator dashboards can be built as a custom software application or acquired as an available product or web-based subscription service.

While dashboards can be convenient, what really matters is the consistency of information a business owner or management team receives. Through that consistency trends can be observed, allowing proper responses.

John Lauber is a CPA and president of LauberCFOs, a firm that pioneered the part-time CFO model. The company provides top financial talent to companies in Wisconsin on a part-time, interim or permanent basis and currently serves as chief financial officer for dozens of small and medium-sized businesses.