TCB Forum Highlights: 2017 Middle Market Forum
In the scheme of the U.S. economy, middle-market companies play a big role. Middle-market businesses—defined as those generating annual revenue between $10 million and $1 billion—account for more than one-fifth of business revenue in the nation.
To explore how Minnesota fits into this landscape, Twin Cities Business convened its annual Middle-Market Forum on March 16 at the Metropolitan Ballroom in Golden Valley. Middle-market company leaders shared how they are faring in today’s economy, political climate and global environment.
Joining TCB as panelists this year were: Jerry Mattys, CEO of Minneapolis-based Tactile Medical, a treatment and home therapy provider for people living with chronic disease; Alan McLenaghan, CEO of Faribault-based SageGlass, a specialized glass developer; Chuck Runyon, CEO and co-founder of Woodbury-based Anytime Fitness, a health and fitness club business; and Jennifer Smith, president and CEO of Burnsville-based Innovative Office Solutions, an office supplies and equipment provider.
The forum was moderated by Dale Kurschner, editor in chief of TCB, and sponsored by Salo, Associated Bank and ACG Minnesota.
Here are edited excerpts from the event.
TCB: In the current political landscape, how are you navigating your company through some of the uncertainties that are arising?
Jerry Mattys: We prepare for the uncertainties around three points: capital, advice and alignment. If the seas get rough, we need to make sure we have enough in the bank. We need to have good advice to guide our decisions as the sea changes, and we need to create a vision and incentives that align employees’ perspectives with management’s.
Jennifer Smith: One of the things being talked about is deregulation of labor and taxes. On the good side, when businesses grow, it helps the economy, but you also have to look at interest rates. If they increase too fast, it’s going to be hard to access capital, making it harder to grow through acquisitions.
Alan McLenaghan: Twenty-one languages are spoken at Sage in Faribault, and right now a lot of employees are coming to human resources, asking “What does this mean for me, for my future?” And quite honestly, we don’t know. We do know that if we are going to forge forward as a globally admired country with its history of innovation, then we need to make sure we continue looking at the global talent pool.
TCB: How do you accentuate your company culture and how does that help with attracting and retaining talent?
McLenaghan: Every Sunday I write a message that goes out to everyone in the company. It talks about our values, what’s happened in the last week, what cool jobs we are working on and what issues we have. We need to make sure people feel engaged.
Chuck Runyon: Undertime is one of the biggest growth impediments in a business—it’s when we pay our team for being physically present, but not mentally present. Part of my day includes thinking about how I can make sure our team is engaged and aligned in what they do. Over the course of time, highly talented employees who are engaged in the business will outperform your competitors.
Smith: It also translates to how your customers feel about you, so you need employees who understand your purpose.
Mattys: For us, showing employees a path forward in their own career and giving them the opportunity to grow personally, I think, is what keeps people with us at Tactile.
TCB: What do you do differently to engage employees?
Runyon: Four words: people, purpose, profits, play. We want a culture of growth, so we invest in people to grow personally and professionally. On the purpose side, we are always trying to convey what their work means and how it changes people’s lives. Profits allow opportunities for your team, and there is a science behind play that fosters creativity, collaboration, less stress and more engagement.
TCB: What are you doing to identify and prepare young talent for management roles?
Smith: We let employees lead sessions to teach other employees about certain topics. Who steps up and leads those courses is how we are starting to identify our next generation of leaders.
McLenaghan: We run something called “the bridge,” which is a shadow senior leadership team. It effectively picks up on issues that the senior leadership team is either missing or ignoring, and it also gives employees practice running the business as a team.
Mattys: Two things. First, we give them the opportunity to engage by taking on cross-functional responsibilities and community service opportunities. We find that millennials really jump into the service option. Secondly, we started hiring younger, less experienced salespeople to work underneath our most successful reps. We give the reps an opportunity to try supervising and managing first, and if they like it and are successful, then we give them another associate. It allows them the chance to take on more if they want to.
Kate LeRette is associate editor of Twin Cities Business.