A look at what’s behind today's Minnesota business headlines.

When falling down on the job is not a figure of speech

Posted by: Evan Ramstad Updated: June 5, 2014 - 5:21 PM

On construction sites, utility poles, energy drilling locations and mines, the greatest danger is losing your feet and falling. Fifty-four Minnesotans died in construction accidents from 2010 to 2012, the latest years for which data is available, and nearly half of those deaths resulted from falls or slips.

This week, Red Wing-based Capital Safety, one of the largest makers of fall protection gear, is aiming to get in front of 50,000 construction workers with demonstrations of the latest in equipment and best practices. The company has 36-specially built safety demo trucks rolling across the country. Their work is part of a broader push by the U.S. Occupational Safety and Health Administration this week to get construction firms to focus on fall prevention.

Capital Safety visited workers at both stadiums under construction in the Twin Cities, the Vikings stadium in downtown Minneapolis and the Saints stadium in downtown St. Paul, on Wednesday. On Thursday, one of the places the company visited was the former Pillsbury flour mill just across the Mississippi from downtown Minneapolis. There, about 150 workers are transforming the huge mill into artists studios and lofts by cutting holes on the sides of, and building floors into, 10-story high silos.

Workers at the A Mill Artists Lofts site in Minneapols gather for demonstration on fall safety.

Workers at the A Mill Artists Lofts site in Minneapols gather for demonstration on fall safety.

Kevin Coplan, president of Capital Safety's North America operations, said the company and industry are focused on developing products that both reduce the force that workers take when they go into a freefall and the distance they go. Federal regulations say that safety equipment may not let a worker fall more than six feet. Even at that distance, the force on the body can be 10 times a person's weight. A 300-pound worker, for instance, would create 3,500 pounds of energy in a six-foot fall.

The most advanced gear is called a "self retracting lifeline" and goes into action the moment it senses a worker's body moving into an accelerated speed. In the demonstration by Capital Safety, a 220-pound weigh was stopped just two feet into a potential six-foot drop. "As soon as it senses a certain speeds, it locks and arrests energy," Coplan said.

OSHA requires fall safety equipment to create a maximum energy of 1,800 pounds. Manufacturers like Capital Safety, 3M and Honeywell, have products that generally have reduced the amount of force from a fall to 900 to 1,350 pounds.

Such safety development work is a relatively unheralded area of high-tech engineering and value-added manufacturing. At Capital Safety's Red Wing plant, there are about 550 manufacturing workers and about 30 in the R&D department. Coplan said the Capital Safety, which is owned by the private equity firm KKR, produces 20 to 30 innovations and new products a year. It has sales units around the world. And every year, hundreds of job superintendents, safety directors and other specialist workers visit Capital Safety training facilities in Red Wing, Texas and California for certification courses in fall protection.

The recovery of the construction industry has been good for Capital Safety's business. Coplan said the firm is seeing growth across every one of its market segments, though. In Minnesota, there were 105,500 people working in construction in April, the latest month for which data is available. That's up from 99,000  a year ago but still well below the pre-recession peak in 2005 and 2006 of 131,000.

About 350 workers at the Vikings stadium site in Minneapols watched the Capital Safety presentation on Wednesday. Photo from Minnesota Sports Facilities Authority.

The bottom line at Carlson School graduation: humility

Posted by: Evan Ramstad Updated: May 23, 2014 - 11:35 AM

They are cocks of the walk. They say "learnings" instead of "lessons." The newest Masters of the Universe. And they're emerging from universities across the nation this time of year: graduates of business schools armed with an MBA or related degree and filled with certainty as they look for jobs in the upper reaches of Corporate America.

At the Carlson School of Management's graduation at the University of Minnesota earlier this week, the class of 2014 got a slightly different message: humility matters just as much as self confidence in business.

It came from keynote speaker Thomas Staggs, a Minnesota native and U graduate who is now chairman of Walt Disney Resorts. He spent about half of his speech on the topic and said that the best business leaders he has encountered in his career recognized the power of humility.

Staggs said when he asked his first boss at Dain Bosworth, the well-regarded Minneapolis finance executive Dick McFarland, what made him successful, McFarland didn't hesitate in his response.  "I'm successful because I assume I can learn something from every single person I encounter on any given day," Staggs recalled McFarland saying.

He also noted that Frank Wells, the Disney president who died in a helicopter accident in 1994, was found on his death to be carrying a piece of paper in his wallet that he'd gotten in a fortune cookie decades earlier. It simply said, "Humility is the final achievement."

On that, Staggs told the graduates, "If you're looking for a mantra to take with you as you go out of the world, you could do a lot worse than that one."

He pointed out that humility is not the same as self-doubt. "In fact, simultaneously possessing a healthy measure of humility and self confidence is one of the best recipes I know for sustained success," Staggs said. "Having one without the other is likely to make you either ineffective, or annoying, or both."

The speech built momentum to this passage, in which Staggs, in just a few pithy sentences, showed why humility is important for both leading a business and building a career:

"One of the dangerous things about success is that it can kill your interest in introspection. After all, whatever you're doing is obviously working, so why bother reflecting on it? Although it sounds ironic, it takes confidence to admit that you don't have all the right answers. But humility is what keeps us asking questions. It motivates us to learn. It makes us receptive to new things. Humility makes us keep trying and makes us willing to look beyond ourselves. If you can do that on a pretty consistent basis, then you're going to be ahead of the game."

The Carlson school posted a video of Staggs' speech on YouTube Thursday. You can watch it below or open in a new window here.

Coming along the Green Line: A Night Market

Posted by: Evan Ramstad Updated: May 15, 2014 - 6:15 PM

With just four weeks to go before the start of the Green Line light rail service from downtown Minneapolis to downtown St. Paul, the press coverage is already rolling. MPR earlier this week about signal adjustments to speed up travel time on the line. Just today, media all around town reported about a survey that found $2.5 billion in business investments along the route and our Best of Minnesota section refers to the Mears Park summer concerts as the "best excuse" to take the line.

One of the lesser-noticed, at least so far, projects we're keeping an eye on is a plan by the Asian Economic Development Association to start a night market in St. Paul's Little Mekong district on University Ave. near the intersection with Western Ave.

Travelers to Asian countries are familiar with night markets. They're common in cities like Hong Kong, Seoul, Bangkok, Manila, Ho Chi Minh, and even in smaller places like Luang Prabang, Laos. In Minnesota terms, a night market is a kind of like crossing the State Fair with a farmer's market and a tent sale. It's an open-air bazaar of  stalls where people sell handicrafts, artwork, jewelry, trinkets and freshly-made food, lots of food.

The AEDA for several weeks has been taking applications for its night market, which at around 50 stalls will be pretty small compared to its Asian counterparts, that will debut on Saturday, June 14, the opening day of the Green Line. They've already lined up sellers of southeast Asian handbags and other crafts and several food vendors. And they're lining up music acts and entertainment, too.

"We’re never going to replicate the night markets in China or Thailand but we’re hoping it’s a draw for people," says Theresa Swaney, a spokeswoman for AEDA.

The plan is to run the night market every third Saturday through the summer. Shoppers could, for instance, spend an hour or two in the market, then take the light rail into downtown St. Paul to restaurants and bars there or, going in the other direction, to the area around the University of Minnesota or on into downtown Minneapolis for more entertainment options.

Developing the market is part of a broader change in strategy for AEDA, which formed in part to promote businesses along University that were disrupted by the building of the light rail line. The non-profit group in January broadened its scope by hiring two business counselors to help entrepreneurs on the east side of the metro area with planning and fund-raising.

AEDA is looking at night markets that have been run in places like Chicago and Philadelphia for ideas about making the concept work for the Twin Cities. "Diversity is what’s important to differentiate this night market from a farmers’ market," Swaney said. "And that includes a diversity of people who will be selling at it."

Bakken's biggest producer makes it through winter

Posted by: Evan Ramstad Updated: May 8, 2014 - 12:41 PM

Harold Hamm, the CEO of the biggest oil producer in North Dakota's Bakken range, finished the scripted portion of his explanation of first quarter results Thursday by saying, "I assure you we're almost done talking about North Dakota weather."

For Hamm's Oklahoma City-based Continental Resources Inc., the brutal winter in western North Dakota and much of the Upper Midwest did surprisingly little to slow its rapid growth. Broader measures of production in North Dakota showed lower output during the winter months following a peak in November. But Continental Resources said it produced the equivalent of 97,000 barrels a day during the first three months of the year, up 4% from the last three months of 2012 and 27% from the same period a year ago.

The company accounts for about 10% of all production in the Bakken. And Bakken production accounts for about two-thirds of its output; it also has a major play in southern Oklahoma.

But the severe winter did slowed down its ability to complete new wells. Executives said most of the 70 wells it completed during the quarter happened in March. A backlog of wells that have been started but aren't yet completed, or producing oil, grew and the company has hired extra crews to work it down.

Even as temperatures warmed up, some work was slowed by spring thaw restrictions that are designed to prevent trucks and big machinery from chewing up roads and land, Continental Resources executives said.

The company's profit rose 70 percent but its per-share figure missed analysts' target by 3 cents and its stock fell Thursday. Executives blamed the profit miss on a buildup in inventory that had to be stored near well sites in North Dakota because trucks and rail cars experienced weather-related delays.

Hamm said, "We anticipate much better operating conditions in the next several weeks. We’re ready to shift into high gear."

When the shoe began to drop for Steinhafel

Posted by: Evan Ramstad Updated: May 5, 2014 - 12:40 PM

While analysts this morning described the departure of Target CEO Gregg Steinhafel as abrupt, the first sign of the depth of his trouble came in late January, about a month after the data breach was made public. That's when The Wall Street Journal published a story that, citing "a person familiar with the matter," said Target's board was taking a more active role in the company's management and wanted Steinhafel to be more visible.

For a board that has a reputation of discipline and quiet, that was a flashing signal. Steinhafel's team countered by providing access to another Journal reporter that led to a flattering front-page profile the next month. With that story, Steinhafel's portrayal in the Journal had swung from being "under pressure" to being "aggressive" in disclosing Target's troubles.

Journalistic watchdogs criticized the newspaper for compromising itself after Bloomberg Businessweek in March produced a cover story, headlined "How Target Blew It," that contradicted some of the portrayal of Steinhafel and his team in the Journal profile. The magazine reported that Target's IT systems were warning about the breach for more than two weeks before anything got done. Senior managers finally learned of the matter when federal authorities who monitor cybercrimes sought a meeting with the company.

Even so, when the Star Tribune pressed the company in late March for clarity on Steinhafel's status, Neal St. Anthony reported this statement that a Target spokeswoman attributed to the board: "Gregg Steinhafel has the full confidence of the board. We believe he is the right leader for Target to navigate through the current challenges we are facing."

Neal also quoted Gary Hewitt, head of research at New York-based GMI Ratings, on the difficulty of creating turnover at the top of a big company like Target. “Steinhafel also is chairman of that board … and it takes a lot to push a board over to take independent action against a CEO," Hewitt said.

The final straw isn't yet publicly known. The company has delayed the release of its 2013 proxy, which would reveal Steinhafel's pay package for the year and the progress, or lack of it, against some performance goals. Another potential factor: results for the company's fiscal first quarter, which covers February, March and April. They will be publicly announced on May 21, though Target board members may have week-to-week numbers already.

A change on the angel investing scene in the Twin Cities

Posted by: Evan Ramstad Updated: May 1, 2014 - 5:34 PM

The business of money-that-gets-business-started is rationalizing in the Twin Cities.

Our columnist Lee Schafer last weekend wrote about the difficulties a public-private business development effort called AccelerateMSP was having trouble getting support for its program. The group is set up to help entrepreneurs but it's finding that, after deciding not to be a source of capital and investment dollars for small businesses, there may not be much demand for what else it can do.

To someone starting a business, access to money is always going to be more important and provide the best return on time spent getting advice from other people. But there are other forces at work in the Twin CIties start-up community, including technology that has streamlined the capital-seeking process.

In his column, Lee noted that even one of the region's better-known helpers of new business, the medtech trade association LifeScience Alley, was on the verge of ending its angel investment program known as the Minnesota Angel Network. On Wednesday, LifeScience Alley and the BioBusiness Alliance of Minnesota formally announced it was shutting down the angel investing operation. It asked investors who have participated in the network and enterpreneurs who have sought money from it to turn instead to a group called Gopher Angels.

Angel investing is usually done by very wealthy people and is considered so risky that the SEC even has a accreditation process for it to protect both the investors and entrepreneurs.

LifeScience Alley and BioBusiness Alliance of Minnesota cited several reasons for the change. One was that many of their initial goals when they started the Minnesota Angel Network in 2009 had been met. The second was that a number of angel networks have arisen in the area. There's Twin Cities Angels, AngelPolleNation, The Network Connect and Gopher Angels. Broadly, these groups are all local versions of "Shark Tank" and, to a degree, they compete with each other and have developed efficiencies that are useful for both entrepreneurs and investors.

Gopher Angels, for instance, is a group of just over 50 wealthy people in the Twin Cities from a variety of industries, not just medtech. Like many angel groups, Gopher Angels uses a web-based platform called Gust to sift through entrepreneurs and their ideas. Bimonthly, it invites several entrepreneurs who are looking for funds to an evening meeting attended by its investors. The entrepreneurs have a limited time to present their ideas and respond to questions from the investors. Then, at the end of the evening, the investors who want to follow up get with each other and decide how to proceed. 

Since it was started two years ago, Gopher Angels members have invested more than $2.5 million in 12 companies. "When we see a deal, we organize ourselves to do the proper due diligence and vet it," said David Russick, managing director of Gopher Angels.

He said investors who belonged to Minnesota Angel Network will be invited to join Gopher Angels. Even if they don't, they will have an opportunity to co-invest at times. "We are hoping to bring more people into a structured environment where they can funnel their money into these businesses," Russick said.


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