A sales representative by trade, Tim Guenther, 32, of Urbana started a small Internet retail company four years ago to help give him a competitive edge selling building products. Little did he know that his company, which had $14,000 in sales in the first year, would explode.

The once one-man company, ClickStop, now has 20 employees and continues to add more despite the recession. It made about $5 million in sales last year and expects to hit $10 million in sales this year.

“We’re going to need an economic tail wind to do it. We’ve had so much head wind. If we’re growing 50 to 60 percent while we’re being pushed down, imagine what we could do if the economy improves,” said Shaun Linderbaum, vice president and chief technology officer for ClickStop and Guenther’s right hand man.

Guenther, president and CEO of ClickStop, lured Linderbaum, 32, who had helped him start his Web site to the company from Deere Co. when business picked up.

“It’s a lot more exciting,” Linderbaum said of his new job. “Every day is an interesting challenge. I’m excited to get up and go to work every day.”

While they were able to take the company far, the two knew they needed some skilled help last spring. So they turned to The Entrepreneurial Development Center in Cedar Rapids.

“They’ve really pushed us to think about things we’re not thinking about,” Linderbaum said.

ClickStop’s “ability to build Internet sales engines is really good,” said Curt Nelson, president and CEO of The EDC. “They’ve really got their business scaling at a really fast rate.”

Nelson said The EDC tries to help ClickStop and other companies manage their growth.

“A business can easily grow right into bankruptcy,” he said.

They’ve really helped hold us accountable during that growth, Guenther said of The EDC.

Guenther attributes ClickStop’s success to simply capitalizing on a change in shopping habits that many companies have been slow to grasp — e-commerce. With Web optimization and Web advertising, ClickStop’s e-commerce sites have become the top search results in the products it sells, Guenther said.

“That’s our way of sneaking up on industries,” he said.

The company is getting used to being in transition as it expands its warehouse and office space, but it hopes to start building a new $2 million, 35,000-square-foot building in Urbana’s new economic development park along Interstate 380 this spring.

The four-year-old company sells six e-commerce brands with products ranging from building materials to vitamins to cat furniture.

“We don’t manufacture it. We do private label it,” Guenther said.

That alone has allowed the company to expand rapidly.

The EDC has also helped ClickStop organize its inventory.

“We were carrying too much,” Linderbaum admits.

That’s a problem for a lot of companies, especially when credit is tight, said The EDC’s Nelson.

Too much inventory ties up too much cash that’s not available to reinvest. Companies need to make sure they have a good manufacturing resource planning system to track that, he said.

Most recently, the EDC has been helping the company with its organizational structure.

“When we were just six people we all just did everything,” Guenther said.

When they needed another employee they’d just post a job and told the person to come see that they did to see if it was what they’d like to do, he said.

“We didn’t want to put people into boxes. We wanted them to be able to contribute where they could,” Linderbaum said.

That’s all changed.

“We’re already seeing a value,” Linderbaum said.

“We know now that roles have to be defined,” Guenther said.

Jane Burroughs, vice president of operations at The EDC, said that clearly defined roles leads to reduced duplication, decreased errors and increased production.

“If you focus people in silos, they do the same work over time. That’s what makes them faster,” Burroughs said.

ClickStop also needed the right people in the right positions to keep growing and the recession has helped in that respect.

“We’ve been able to get a lot of good, really talented, loyal hardworking people. We’re scooping them up as fast as we can,” Linderbaum said.

Nelson said that convincing small start-ups that want to grow that they might need to get rid of or move a person who has been with the company since the start of the company is often a difficult thing for people to do.

“Sometimes you just don’t have all the right people.” Nelson said.

ClickStop hopes to keep their employees by providing a fun environment and competitive benefits.

“We’ve (Guenther and Linderbaum) both worked in larger companies. We’ve never done this before, but it feels good — satisfying — to make a profit and be able to do something nice for your employees,” Guenther said.

Working with the EDC has also given them even more confidence to grow.

Guenther admitted he was tentative about growing by acquiring companies, but consulting with the EDC showed him it was a good strategy, especially since companies can be purchased at a good value right now because of the economy.

“You can spot opportunities in this economy,” Guenther said.

The business:

(319) 369-4955

By Dave DeWitte

When it comes to interviewing job candidates, a little management training can go a long, long way.

That’s the view of established experts, who say managers often lack training in such areas as what to ask, how to ask it, and how to gather different perspectives of a job candidate’s abilities. They offer tips to help beef up those interviewing skills so that when it’s time for companies to start hiring again, they’re ready.

Bill Humbert of TheRecruiterGuy.com said businesses often underestimate the financial costs of a bad hire. As a result, they often underinvest in backgrounding and interviewing job candidates.

“Many companies will glance at their ‘hard costs’ of letting someone go, but never even consider their potentially catastrophic ’soft costs,’ Humbert writes in his blog. He said soft costs could include such things as the lost productivity of other team members who must step in to perform work a new hire fails to perform adequately, and customers who take away their business because of a new hire’s incompetence.

If businesses took hiring seriously, Humbert said they would have managers in each department trained and “certified” in their hiring skills, rather than assuming any manager knows how to hire.

Think one interview is enough?

Think again, said Morris Pounds, a professor and career counselor at Kirkwood Community College for 30 years.

“The more times you interview, the more you have a better idea what type of candidate you have,” Pounds said.

Pounds recommends that a candidate be interviewed in several different types of situations. A one-on-one interview is only a starting point, Pounds said. He also recommends interviews with a peer panel, other employees that could help establish how others react to the candidate, and an interview over a meal that might reveal more about the candidate’s social skills.

Too often, Pounds said, interviewers get caught up in asking general questions such as the candidate’s strengths and weaknesses, or why they want the job. Such questions can be easily anticipated beforehand, or coached, he said.

“Ask questions that are really related to the jobs they’re applying for,” Pounds said.

Pounds also recommends interviewers drill down on specific hard skills needed for a job. If their proficiency isn’t clear, they should be tested.

“You need to tell me not only what you’re familiar with, but what you’re proficient in. If you say you’re proficient in Excel, you should be able to create spreadsheets and databases in your sleep.” he said.

Pounds is a big fan of “situational behavior questions,” which essentially ask the candidate how they would respond in a given situation. Even if the candidate’s answer is unexpected, it often reveals something important about the logic of the candidate’s reasoning, or lack thereof.

One of the biggest issues Humbert sees in interviewing is the manager’s insistence on rigidly adhering to a list of prepared questions.

When a manager is given a list of questions without training them to listen to the candidate’s response, they tend to focus on the next question instead of understanding and evaluating the response to their last question. By actively listening, Humbert said managers gather more material to probe. Further questioning the candidate about their responses may be more on-target than any list of questions the managers used to begin the interview.

When companies train managers in hiring, it’s often training focused on legal issues. Pounds said most hiring managers by now know they aren’t allowed to ask candidates discriminatory questions such as age, how many children they have, or their religious views.

But some candidates remain intently interested in those matters, and use other “fishing” questions to seek the answers.

“I hear horror stories,” Pounds said, relating one about an older woman who was told the employer needed to see her driver’s license before an interview even began.

Pounds encourages employers to let candidates ask questions and to answer them honestly. He said the questions a candidate asks often reveals as much about their knowledge and interest in a position than the answers they provide.

Even if an employer conducts a good interview, Pounds said many find other ways to screw up the hiring opportunity. Many employers now require applicants to fill out extensive online questionnaires with questions so detailed that many candidates don’t honestly know the answers. They might not know their starting and finishing wages at their last three jobs, but some online forms cannot be submitted unless the candidate has filled out every line.

After the interview, many employers fail to keep candidates informed about the status of their hiring process, even if they have promised to do so. As a result, Pounds said, employers stand to lose interest of the best candidates. Since these candidates often have more options to choose from, they will pursue other opportunities that seem more real to them.

Humbert advises employers hiring for key positions to do a pre-interview telephone screen with the candidate. By asking a shortlist of essential questions, it’s often possible to screen out the candidates who wouldn’t meet the job expectations, and save the time and cost associated with the in-person interview, he said.

By George C. Ford

As companies look for efficiencies to prepare for a recovering economy, the Corridor will face renewed competition this year to retain existing industry and jobs.

Mark Seckman, president of Priority One in Cedar Rapids, said corporations are looking at their “footprint” with an eye toward consolidation.

“They’re deciding where can they make cost-saving maneuvers,” Seckman said. “We’re going to be competing for existing business consolidation projects. Companies will either consolidate in their Corridor location or another location.”

Seckman noted that Cedar Rapids experienced corporate consolidation in 2009 when Cryovac/Sealed Air, Midland Forge and Terex transferred production to other states and GE Financial Services and Iowa Precision Industries consolidated operations in Cedar Rapids.

Seckman said Europe will continue to be a strong market for Cedar Rapids and the Corridor in food ingredients, bioprocessing and food processing.

“Our focus in Europe is on companies that have sales in the United States, but have not established production or distribution outlets to support those sales,” Seckman said. “With the current exchange rate between the dollar and euro, now is a very favorable time for European companies to expand into the United States.”

At the southern end of the Corridor, Joe Raso, president of the Iowa City Area Development Group, says there is strong activity among companies that provide software and information technology integration services to larger firms.

“We’ve been working recently with three separate projects across a number of industries,” Raso said. “All three will be in the 25-to-50-person staff, which is really excellent for our market. Those types of operations have customer service and technical components to them.”

Seckman said the “jury is still out” with regard to attracting wind turbine component manufacturers.

“I think it’s an area where we still have opportunities, but the financial crisis has really hit that industry,” he said. “Some wind farm developers have not been able to get the financing that they need to keep projects moving forward. That has had a ripple effect on wind turbine manufacturers and their component suppliers.”

Seckman believes the wind energy business will start to move forward in the second half of this year.

“There are companies that we’re working with right now that plan to move forward because they have contracts in place,” Seckman said. “Those companies do repair and servicing of existing wind farms.”

Raso also hopes that 2010 will be a strong year for wind energy suppliers, particularly those involved in servicing existing wind farms.

“I hope that will lead to some opportunities for the wind energy campus that we have in Iowa City,” he said. “We will have our first ’shovel ready’ sites certified within the next 30 to 60 days and that should help us with marketing as we come out of this funk.”

Raso said lack of financing in the wind industry has held up projects that were expected to commit to Iowa City eight or nine months ago.

“The hope is that 2010 will bring some kind of announcements on these projects,” he said. “Many of these companies feel they have to be up and running to provide products and services to their customers in 2011. They have to get busy constructing new facilities or building out existing structures to be ready for business next year.

“The comment that we’ve heard from two companies is they’re going to go from zero to 60 miles per hour.”

The sluggish economy and other factors also have put some projects announced in recent years for Cedar Rapids and Amana on hold.

Seckman said Hamlet Protein A/S of Horsens, Denmark, expects to break ground this year for its plant in southwest Cedar Rapids. The company, which originally expected to start construction in the spring of 2009, produces a variety of enhanced soy proteins for pet foods, fish farms and young animals that it exports to 50 countries.

Seckman said Bionade and Alb-Gold Teigwaren of Germany will likely push back construction of their beverage and pasta plants in Amana until 2011 due to Bionade being acquired by a large German brewery and the costs of significant expansion in Europe.

“We met with Alb-Gold and Bionade executives in November and they renewed their commitment to Amana and the United States market,” Seckman said. “The acquisition of Bionade provided a much needed cash infusion after their aggressive expansion in Europe.”

Alb-Gold Teigwaren and Bionade in 2007 signed a letter of intent with the Amana Society to build a 121,500-square-foot production facility on 65 acres near the corner of Highways 151 and 220.

The plants will produce organic egg-based pastas and the organically-fermented Bionade beverage, a new soft drink for the North American market.

Seckman said there may be “niche” corporate projects in the Corridor this year, but no major expansions or construction of new facilities. He said the Corridor is facing strong competition when it competes for projects requiring office space.

“Fortunately, this area did not get out ahead of itself in the last decade in terms of building speculative office space,” he said. “Unfortunately, there are communities like Atlanta where a client we’re talking with can get office space for $8 a square foot with a long-term lease.

“We will continue to work with projects like this because we think there is more to offer than just cheap office space.”

Raso expects the glut of office space in larger markets to continue for several years until demand catches up with supply and rents start to rise.

A recent survey of ICAD members found concern among businesses dependent on state and federal contracts due to projected budget cuts, Raso said. Those dependent on private sector contracts felt more confident about the economy improving.

Raso and Seckman said the sluggish national economy will continue to be a major factor in business decisions. They plan to continue calling on headquarters executives of existing employers, offering assistance and information to those making decisions about potential consolidations or expansions.

By Steve Gravelle

Just when the African American Museum of Iowa is trying to extend its reach, Executive Director Tom Moore is cutting its staffer in charge of statewide programs. Moore said it’s a case of making the best of a bad economic climate.

“We’re trying to do it with the staff here at the museum, rather than have that person in Des Moines,” he said. “That way we get more from the person — when they’re not on the road, they’re here at the museum.”

The economic recession grinds on, taking its toll on charitable donations, endowment earnings, and operating costs even as many social service agencies see increased demand on their services.

“Almost all of our agencies are reporting increases or significant increases in requests for assistance,” said Christine Scheetz, president and CEO of the United Way of Johnson County. “That has been across the board, all age levels that are served by partner agencies, every demographic. The biggest challenges they’re having are trying to do even more with less.”

The downturn has also taken a toll on endowments, and a tight state budget means cuts in fees the government pays for services performed by non-profits,

“It was common in 2008 for people to see anywhere from 25 to 35 percent negative investment return,” wiping out years of endowment revenue, said Dan Baldwin, CEO and president of the Greater Cedar Rapids Community Foundation.

Endowment revenues have recovered with the stock market — the GCRCF’s was up 18 percent for the year through October — but the uncertainty persists, as it does for agencies that administer government programs at the local level.

Dan Strellner, executive director for Abbe Inc., said its affiliate Aging Services saw cuts in Medicaid reimbursements of 2.5 percent to 5 percent effective Dec. 1. Similar reductions are likely, and Abbe has frozen pay and put off major capital expenditures.

“We haven’t reduced the work force yet, and we hope not to,” he said.

“With the needs as great as they are, I think they are looking for services as the last area they want to see cut,” said Scheetz.

Cultural and arts groups like the African American Museum are doing what they can to seek larger audiences and wider donor bases.

“If they’re cultural organizations they’re going to work harder at marketing, and most organizations are going to burn through reserve funds for the next year, if they have that,” said Bob Untiedt, executive director of the Linn County Nonprofit Resource Center.

There are hopeful signs — only 9 percent of the nation’s non-profits expect to cut staff next year, compared to more than 50 percent between 2008 and 2009, according to a survey by the Chronicle of Philanthropy. But it may be difficult to apply national trends to a community still recovering from natural disaster.

“In Cedar Rapids it’s the same thing as Katrina in terms of impact per square inch,” said Willard “Sandy” Boyd, board chairman of the Larned A. Waterman Iowa Nonprofit Resource Center at the University of Iowa.

“It’s kind of hard to split what is flood-related” from the overall economy, observed Orchestra Iowa Executive Director Robert Massey.

The orchestra’s timing, at least, worked in its favor. “Recovery” planning began even before the flood, putting it in a better position to weather the recession.

“Our strategic plan the board developed in 2007 really saw the need for the orchestra to develop itself as a regional orchestra,” said Massey. “We’re trying to say, ‘We’re your orchestra’” to the entire state.

Formerly the Cedar Rapids Symphony, Orchestra Iowa adopted its current name in September 2008, to reflect an extended reach. The move was at least partly in response to “a tapped-out line of credit” Massey inherited when he took on his job the week before the flood hit.

“We didn’t have any reserves,” he said.

The orchestra subsequently lost three corporate sponsors, at $20,000 to $25,000 each, adding urgency to its re-branding. Revenue has been diversified with the help of a two-year Department of Education grant to fund performances, most often with smaller ensembles, across the state.

“This grant has helped to make up some of what we lost,” Massey said.

That’s especially important for arts and cultural organizations.

“Religion’s at the top of the donor’s totem pole and unfortunately cultural organizations are at the bottom,” said Boyd, noting a predicted 9-percent drop in overall charitable giving,

That’s why the African American Museum is also seeking to expand its reach. Moore said his staff is designing exhibits for easy travel to host organizations across the state.

“We’ve built relationships with people across the state before now, and that’s been very helpful,” he said. “We’re looking at the services we can possibly provide.”

In a few cases, agencies are consolidating “back office” services, most notably in the $15 million, 65,000-square-foot Human Services Campus in downtown Cedar Rapids. Announced in October, the project by the United Way of East Central Iowa will house the offices of the Girl Scouts of Eastern Iowa and Western Illinois, Four Oaks, Aging Services, Neighborhood Transit Services and Iowa Legal Aid.

The state I-JOBS-funded project provides new homes for agencies displaced by the flood, but further cost-saving benefits are likely, said Lois Buntz, executive director of the United Way.

“Co-locating them in one facility seemed to make a lot of sense,” said Buntz. “The development of a shared administrative services was kind of the second purpose.”

Buntz hopes to develop a program to offer administrative services to agencies that aren’t at the campus.

“We want to protect the services to people at all costs, because that’s the most important,” she said. “We hope there could be some cost savings also.”

Abbe Inc. already meets that need for its eight affiliates, providing payroll, human resources and financial services.

“I don’t know if more agencies will be looking at that kind of thing in the future,” said Strellner. “I think there’s some potential there — it takes the right agencies, the right size, and the right missions to make it work.”

Getting endowments healthy again will be a key to long-term stability. Baldwin noted the recession also took a toll on gifts through Endow Iowa, the six-year-old state program that encourages endowment development in estate planning.

“There was a period of time starting with the flood through about Labor Day of 2009 where we saw an enormous decrease in those gifts,” said Baldwin. “In order for people to make gifts they have to have confidence.”

Fortunately, “since Labor Day we’ve started to see a lot more confidence,” Baldwin said. “The last quarter of ‘09 should actually be very strong in terms of endowment giving.”

That’s a good omen for everyone, as skeptics dismiss non-profits’ role in their community at their peril, warns Boyd.

“The non-profit sector has to be there,” he said. “When a business is interested in coming into a community there’s concerns about the work force, but most of the questions are about, ‘What’s life like in the community?’ The non-profit sector is critical to that.”

By Dave DeWitte

With many economists believing the worst is over, one of the worst mistakes business leaders can make now is to wait until the recovery is in full bloom to react.

Matt Miller of Mobile Demand in Hiawatha has thought long and hard about what the recovery means for his company. Mobile Demand designs and sells rugged mobile tablet computers used in business.

Miller expects more sales opportunities, so he’s beefed up his sales team. He’s also expecting more inflation, so he’s preparing to review his pricing more frequently as suppliers adjust their prices.

“We’re going to have to be nimble and quick,” Miller said.

Experts say it’s too early to tell if a recovery has arrived, but when the recovery arrives in full steam, it will be too late to gain a competitive advantage.

One thing for certain — it won’t be the same market as it was before the recession began.

Monica Vernon of Vernon Research, Cedar Rapids, said customers are surveying their customers to find out how their needs have changed, and their market expectations for the months ahead. She said they’re also performing competitive analysis, to find out what customers think of their rivals’ products and services.

Retreating from the development of new products and services is one of the worst things a business can do in a recession, according to Vernon.

“You know, life is long,” Vernon said. “What do the customers need and want so that when the economy does come back, you have the product they’re looking for when they have a few dollars in their pocket.”

Mobile Demand kept right on developing its next-generation tablet, the xTablet T7000, even as the recession cut into sales and pricing of current products. When the recovery comes, Mobile Demand will have a more capable product, Miller said, that will be ahead of the competition instead of behind it.

Vernon said larger companies are also researching morale and attitudes within their current employees. Deep employee dissatisfaction now could be bad news when the economy recovers, Vernon said. Top talent might be easily lured away when they are most needed if they feel they are overburdened or disagree with their current employer’s direction.

Curt Nelson of the Entrepreneurial Development Center of Iowa said even small startup businesses should be doing their market research.

“You have to go back on your marketing database and know what customers you have going forward,” he said. “Call them and find out their situation. Are they still your customer. When do they see the upturn coming?”

Nelson said it’s common during a recession to lose some customers, because many businesses are forced to rethink their business models or product needs.

“They may have gone out of business,” Nelson said.

That brings Nelson to one of his key points about recovery preparation. He advised businesses to “revalidate” their business model.

The needs of customers during an industry downturn often change dramatically, Nelson said. Technology companies discovered that in 2001 when the so-called tech bubble burst. Demand for many hardware-centric products had evaporated in the telecommunications market by the time the industry recovered, replaced by software-based products that offered the same functionality.

Nelson urged companies to carefully begin to build back their marketing and advertising campaigns. He said marketing has a delayed effect, with a six-month cycle being quite common. As a result, companies that have let their marketing and advertising lapse might not notice immediately.

Nelson said companies shouldn’t retreat to a marketing campaign that relies too heavily on social media despite the widespread fascination with the potential of Web applications such as Facebook. Use of the social media doesn’t cut across all demographics, Nelson said, and could be ineffective with some older customer groups.

“Go after your competitor’s customers,” Nelson said, but don’t abandon common sense. Because the recession was so deep, Nelson said some customers may be tottering on the brink of failure, or slow to pay. Making a big sale to them today could be a big mistake if they file bankruptcy tomorrow, and get out of paying.

Before taking big orders from a new customer, Nelson said it’s a good idea at such times to research their credit history.

The problems competitors face can make this a good time for small companies to recruit talent. Top managers may even be bailing out of larger competitors that are struggling with the economy.

The challenge, Nelson said, is to keep the great talent once the economy improves and the job market tightens. Employers may have to offer incentives such as stock options to keep them onboard if they can’t pay them a high enough base salary or bonus, he said.

The threat of inflation during a recovery is worth taking seriously, according to Nelson. He urged businesses to evaluate their debt in order to determine how much is tied to indicators such as the prime rate that could rise dramatically. If it’s too much, Nelson said, businesses should see if they can get their loans restructured with interest rate caps, or a fixed interest rate.

With sales off about 40 percent over the previous year, Doug Grunder could have chosen to stay focused on the issues involved in designing industrial mixers and generating more revenue for his company Marion Mixers.

“In business it’s so easy to get sucked into what’s making you money today and not what’s going to make you money 10 years from now or five years from now or next year,” he said.

If he hadn’t been working with a business coach before the recession, his reaction probably would have been to immediately downsize the company. Instead, the president of Marion Mixers has worked one-on-one with business coach David Drewelow of ActionCOACH for the past year to turn the slowdown due to the economic recession into an advantage.

“I already identified what I needed to do. The recession allowed me the time to do it,” Grunder said. “We worked pretty hard in the down time.”

Marion Mixers manufactures horizontal mixing and blending equipment, supplying equipment in the food, plastic, chemicals, minerals and recycling industries.

Grunder bought into Marion Mixers in 1995 with several other investors. About a year ago, those investor/owners agreed the best long-term strategy in the down economy was to take a hard look at strategies, methods and staff as well as make changes and reinvest any revenue back into the company.

The planning began about 2 1/2 years ago when Grunder began meeting with a group of local business owners, called ProfitCLUB. Those peer group members discussed issues of running a business. Members could ask each other for referrals and how each overcame a particular issue such as hiring or firing, for example.

What Grunder learned in ProfitCLUB helped him realize he didn?t want to immediately downsize when the economy slowed down. Because his company was bigger than those in his peer group and it worked with national and international accounts, not just on a local level, Grunder decided to work one-on-one with a business coach to get the information he needed specific to his business.

Drewelow facilitates ProfitCLUB and Grunder had known Drewelow for years through church. Grunder said he had been negative about consulting, but stressed that Drewelow is not a consultant. There is a big difference between working with a coach versus hiring a consultant, he said. A consultant is hired to complete a specific task. A business coach helps the business owner or manager become as good as he can be, just as a sporting coach helps an athlete, Grunder said.

Coaching is an accountability process, Drewelow said, and the coaching relationship is not about what a coach does for his client, but what they do together. For example, it wasn’t Drewelow’s job to develop a 2010 plan for Marion Mixers. That was Grunder’s job.

Drewelow works with Grunder to break that one-year plan into 90-day increments. When they meet twice a month, typically at 7 a.m. for breakfast, it’s the coach’s job to ask the business owner if he’s meeting his short-term and long-term goals and not just dealing with day-to-day issues. Together they work out what needs to be done on the plan over the next two weeks and what tools Grunder may need to assist him.

One of the first things Grunder did to achieve his goal of having a company that can run without him, was to add another layer of management. Previously, all 35 employees reported directly to him. Over the past year, he’s changed that to three who directly report to him, each of whom is responsible for a group of employees.

“That’s a big change,” Grunder said.

Over the past year, he has reorganized his entire business to make it stronger and position the company to grow as the economy turns around. For example, he laid-off employees in some areas, but hired in other areas. Training manuals and documentation were upgraded. And, there’s even been an expansion of physical space to house the additional employees Grunder expects to hire as the market turns around.

In the manufacturing area, major changes have been made. A bright spot in the company’s key industries is the huge growth potential in the area of recycling and the equipment needed. That has been reflected in the company’s long-term plan. The engineering group was restructured to better handle project work flow.

Grunder also delegated key accounts to sales staff so he could go after new accounts. Sales representatives were measured and evaluated and about half were replaced. A slower manufacturing schedule meant he could take the time to identify and recruit the best people available for jobs. Grunder hired a national sales manager who is restructuring the sales organization. More recently, the company hired an international sales manager.

The leadership team of three attends training and is taught what Grunder learns from Drewelow. To continue working on improving his business, Grunder continues to meet with Drewelow and his peer group.

“He’s always looking for ideas to make himself and his business better,” Drewelow said. “I really commend him for taking a proactive position to work on his business ? because his business is better today.”

A big piece of coaching was not about Grunder’s work, but what he does in the rest of his life. Drewelow asked him to evaluate leisure activities, physical health and more. People should know why they are doing what they are doing, Drewelow said. For most people, it’s just about the money but Grunder has a passion for mission work and wants to use his business to support that and other non-business goals.

Grunder’s plan is to essentially retire in 12 years. His exit strategy is not to sell his portion of the company, but, rather, use his dividends from a successful Marion Mixers to fund mission activities in Haiti, on American Indian lands and elsewhere.

For the time being, though, he’ll stay focused on work.

“There are a lot of things that have changed in the last year – and probably more that are going to change,” Grunder said. “I think we’ve positioned ourselves real well for when the market turns around.”

The business:

Marion Mixers

3575 Third Ave.

Marion, Iowa 52302

(319) 377-6371

www.marionmixers.com

The consultant:

S. David Drewelow

Head Coach, USA Iowa/Nebraska Team

ActionCOACH

415 First Ave. SE Suite 215

Cedar Rapids, Iowa 52401

(319) 743-0642

www.daviddrewelow.ActionCOACH.com

This feature shows how business experts have helped entrepreneurs address specific issues that face small businesses.

By Janet Rorholm

It’s been a rough year for every business sector, but especially manufacturing, which lost 2.1 million jobs since December 2007.

Even before the recession, manufacturing was losing jobs to other countries, be it Mexico, China or India. Never has it been so important for a manufacturing company to become more efficient, say business experts.

Inc. Magazine recently named In Tolerance Contract Manufacturing of Cedar Rapids to its Inc. 5000 list of fastest growing companies in 2009. Though the company made the list at No. 4,109, Jack Hardin, general manager at In Tolerance, isn’t sure it will make the prestigious list for 2010 considering the rough year. Still, he’s not complaining too much.

“This year we’re only down 14 percent,” he said.

Other manufacturing companies can only envy those kind of numbers.

“Everybody is having volume issues,” said K.P. Persaud, business coach with ActionCOACH in Amana. Persaud’s background is in manufacturing. He spent the last 10 years at Midland Forge as general manager.

Persaud said he’s working with one company who’s volume is down 40 percent. Revenue dropped from $19 million to $9 million. While layoffs have helped stop some of the bleeding, business owners have to ask themselves whether they can survive at that level. If they can, the next question is “For how long?” he said.

Another client, who’s volume has dropped 30 percent, has three months cash left and another three months line of credit.

Most companies will have to undergo major restructuring to survive, he said.

“The market was weak before the recession, so the question is ‘Can you get the business to survive?’” Persaud said.

If the business is there, manufacturing companies have to make their business “as efficient as they can to survive,” he said. That break even point has got to be as low as it can because “after you’ve run out of cash, there’s no survival.”

He’s troubled because he’s seen many manufacturing companies simply hedging or sitting on the fence, just waiting to see if the economy will turn around. Others are very aggressive and making as many changes as they can to survive.

“You’ve got to understand, this is the worst they’ve ever seen,” he said.

In the last 10 years, Iowa has lost about 52,200 manufacturing jobs, a 20.5 percent decline.

Business experts say that companies who haven’t embraced Lean practices and Six Sigma need to for their own survival.

It’s all about the three Ps: people, products and processes, Persaud said.

With low volumes, you have to reconfigure your processes to run with less people, he said. That may include downsizing not just staffing, but also building and equipment.

Lean and Six Sigma practices aren’t just for manufacturing. Other sectors like the service and health care industries are also embracing the practices, said Steve Wilson, quality expert and business consultant with WCTS Inc. of Cedar Rapids. Everyone is having to do more with less, he said.

Lean is about reducing waste in processes and increasing the speed that services and products flow out to the customer, Wilson said. Six Sigma is about reducing variations in the processes, he said.

You have to apply both, Wilson said. What’s the point of producing a great product and then being three weeks behind the competition in getting it out the door?

“In tough times you have to decide to look at things differently. That might mean you have to make some expenditures to reduce costs. But if you do some of these things, you’ll be so much further ahead from the competition who is putting their heads in the sand and waiting for things to blow over,” Wilson said.

Wilson works with clients on the seven types of waste:

• Defects/corrections

• Inventory

• Over production

• Over processing

• Motion

• Wait

• Transportation

“You need to reduce waste for the purpose of increasing market share and profitability and expansion. It’s all about opening up opportunities and reducing redundancies,” Wilson said.

He said getting buy-in from employees, especially top management, is crucial in instilling Lean and Six Sigma practices. Accepting responsibility is also important.

“Often quality is seen as the responsibility of some department or person. Responsibility is everybody, every day and unless you are able to communicate that, it will always be a challenge,” Wilson said.

Some area manufacturers have already embraced these ideas and have reaped the rewards. These are the businesses that will survive, experts say.

One of those is Pickwick Manufacturing Services of Cedar Rapids, which along with In Tolerance also made the 2009 Inc. 5000 list. Pickwick President Walt Corey said innovation, customer satisfaction and versatility are key to giving his company a competitive edge.

“If you’re selling equipment for various uses in different industries, you have no idea what you’re going to sell and you need versatility,” he said.

Pickwick engineers work with existing and potential customers to redesign existing products to reduce manufacturing time and trim material costs.

In Tolerance, the small, manufacturing company that makes piece parts largely for Rockwell Collins and other aeronautic firms is down five employees after layoffs in April. They currently employ 33 workers.

While being small may be seen as a disadvantage by some, Hardin and other business experts say that being small has helped them, especially in times like these.

“We’re small enough and flexible enough and we have cross trained our employees so that we can react as good as or better than most,” Hardin said.

Hardin believes a strong focus on customer service is key for his company in maintaining a competitive edge.

“We’re doing what we’ve always tried to do better than other companies, offer better customer service…” Hardin said. “You have to have a good price and quality, don’t get me wrong, but what we believe in is being good at customer relations.”

Hardin said In Tolerance empowers all of its employees to talk to customers, so that the company can respond to a client’s request immediately.

“It has definitely helped,” Hardin said.

In Tolerance stresses the belief that the customer is No. 1 and the customer is always right. That mantra seems to be working; most of its new customers come from word-of-mouth.

“In Wichita (Kan.) we picked up four new companies last year based on word-of-mouth,” Hardin said.

Also working in the company’s favor is an experienced staff. In Tolerance has little turnover, which Hardin attributes to “good employee relations.” “We treat employees like family,” he says.

The average service with the company is 17 years. The company also offers competitive wages and benefits. It pays 90 percent of an employee’s health insurance for single and family plans and it offers the standard vacation and 401(k). Employees can also earn leisure credits for coming to work on time and staying the full-day, which can later be used later to give the employee flexibility. As a result, “we have zero absenteeism problems,” Hardin said.

Hardin thinks things will start looking better soon for the company, now that the recession is lessening its grip.

“I’m actually optimistic that things will start to turn around within the next year,” Hardin said. “We see a lot of activity, a lot of quoting going on right now.”

Companies are just waiting for the right time to start increasing their production.

“There’s enough activity that if we can get a decent share of that, we could be bring back some people,” Hardin said.

By George C. Ford

Research shows that employee morale is directly linked to productivity.

The more happy and satisfied employees are, the more productivity will increase. During this extremely tough economy, keeping employee morale up is more important than ever.

Communication, education and appreciation are the top three things cited by Eastern Iowa companies when asked what they do to bolster employee morale.

“We do ‘all hands’ company meetings every month,” said Eric Engelmann, president and chief executive of Geonetric in northeast Cedar Rapids. “We review in detail what is going on, why it is happening and how it relates to achieving our goals. It’s a big deal for us to be that transparent because it gets people invested in what we’re aiming for.”

Geonetric, which provides online solutions for the health care industry, was recognized last month by Modern Healthcare magazine as the 23rd best place to work in the health care industry.

Investing in continuing education is another area that Corridor employers feel is essential to maintaining good employee morale.

“We have made a conscious decision to maintain the investment in our employees’ training and development,” said Soni Harney, senior vice president and director of human resources for MidwestOne Bank in Iowa City. “Continual learning is one of the operating principles in our company, so we talk about it a lot. We provide tools and resources for our people internally, but they have to go after them.”

Engelmann said Geonetric last year began offering an employee stipend for continuing education.

“It’s designed for conferences or training seminars, either online or in person,” he said. “We’ve had a lot of success getting people outside their normal comfort zone and encouraging them to take on training either in what they’re doing or a new aspect that they’ve never thought of before.”

At GreatAmerica Leasing in downtown Cedar Rapids, employees also receive a briefing each quarter on the financial status of the company and the financial services industry. They also find time to have some fun with themed events, like October’s annual Halloween decorating contest.

“Employees were invited to bring their children into the office to ‘trick-or-treat’ from desk to desk,” said Matt Doty, GreatAmerica director of corporate communications.

“We really get into our fundraisers for the community, whether it’s ‘Bowling for Kids Sake’ or United Way. There’s always some friendly competition that goes on.”

Harney said MidwestOne believes employee recognition is essential to maintaining positive employee morale.

“When we have a good customer impact story, we like to share it with everybody,” she said. “It gives the employees who had something to do with that situation some recognition for taking it on. Probably 75 percent of our monthly staff meetings, which involves each location calling in, are devoted to employee recognition.”

Harney said MidwestOne also has some friendly employee competition each year during its United Way campaign. This year, employees competed in a Nintendo Wii bowling tournament, with the popular game console as the top prize.

Creating an inviting work environment can be a key ingredient in bolstering employee morale, according to Geonetric’s Engelmann.

“We spend a lot of time and money making our work environment the best that we can make it,” he said. “We bring in a massage therapist every other month and we hold events like Halloween gatherings for our employee’s children and families.”

Geonetric also provides free cereal, a coffee bean grinder and espresso machine, soda and tea for its employees along with casual dress and flexible scheduling.

With tough economic times, many Corridor employers are looking for low-cost ways to boost employee morale.

Customer service associates at Toyota Financial Services in Cedar Rapids played “Battleship” last month. When employees reached a percentage of their call-time statistics each week, they had a chance to sink a battleship on the flip side of the game’s plastic “ocean” grid.

If they landed on a supervisor’s battleship, they “sank” it and won breakfast with the supervisor. If they just hit the ship, they won a candy bar or similar prize.

By Janet Rorholm

You’re hot. Your co-worker is cold. For facilities managers, it seems as if there is no pleasing everyone.

A 2009 study by the International Facility Management Association shows the top office complaint among employees is temperature settings over high noise levels, limited space or unpleasant odors. It’s either too cold (94 percent) or too hot (91 percent). Indoor air quality complaints are a distant third (25 percent), followed by too drafty (21 percent) and too noisy (16 percent).

Preferences aside, the survey also showed that many facility managers are adjusting the thermostat to higher settings in the summer and lower settings in the winter in an effort to cut energy consumption and costs.

Since a one size fits all approach rarely works, facility managers said the most common way of addressing complaints is either through the use of personal fans (66 percent) or by a change in clothing (64 percent). Popular with workers — though not always with building management — is the use of personal heaters, which 60 percent of facility professionals reported seeing used in the workplace. Many facility managers reported personal heaters are not allowed in their buildings because they present a fire hazard.

If employees think there complaints go ignored, however, they could be right. The survey showed that facility mangers sometimes say they will make an adjustment, but don’t. “This actually seems to work,” said one person.

The temperature wars have been especially difficult in downtown Cedar Rapids as area businesses lost steam heat used to regulate heating and cooling functions after the June 2008 floods knocked out Alliant Energy’s steam generating station. Businesses have scrambled to put in their own systems. Employees have had to adjust to fluctuating temperatures.

Ken White, senior manager of facilities at Gazette Communications, said when it comes to temperatures, the Occupational Safety Health Administration recommends temperature control in the range of 68 to 76 degrees year-round as well as a humidity control in the range of 20 to 60 percent. MidAmerican Energy recommends a baseline of 78 degrees in summer for cooling and 68 degrees in winter for heating.

But does temperature settings come down to just a matter of personal preference? Yes and no. Studies suggest temperatures and indoor air quality can have a direct effect on worker’s productivity levels and it seems warm workers work better, according to several Cornell University studies.

Chilly workers not only make more errors but cooler temperatures could increase a worker’s hourly labor cost by 10 percent, estimated Alan Hedge, professor in the Department of Design and Environmental Analysis at Cornell University.

Hedge found that when the office temperature in a monthlong study increased from 68 to 77 degrees Fahrenheit, typing errors fell by 44 percent and typing output jumped 150 percent.

“The results of our study also suggest raising the temperature to a more comfortable thermal zone saves employers about $2 per worker, per hour,” Hedge said. “Temperature is certainly a key variable that can impact performance.”