Legendary Rural Leaders

Energy, Water & Natural Resources (Day 2)
Thursday, February 10, 2022
Submitted by Karly Frederick

Julie Lorenz, Secretary of Transportation: With a background in organizational psychology, Secretary Lorenz tries to approach transportation as a means to an end for people. In Kansas, there is a 10 people per one mile of road. The importance of infrastructure can be demonstrated in the example shared of Brazil and the soybean market. The U.S. soybean market declined, while Brazil’s increased which can be directly correlated with investment in infrastructure.

Much of Secretary’s Lorenz’s talk emphasized the power of regionalism. The State of Kansas can no longer be rural vs. urban. A phrase that was shared was ‘Ad Astra Simul’ – To The Stars Together. Progress truly has partners, some of the partners for progress with KDOT is the IKE program, ARPA infrastructure dollars, and more programs.

Jimmy Todd, NexTech: NexTech’s service area is roughly the size of the state of Maryland, yet serves 30,000 people. NexTech provides calea services, IT, advertising, and more services to residents and businesses. Part of their mission includes expanding rural broadband. Fiber is the most ‘future-proof’ network as it allows more cloud-based and remote activities. The downside is, that fiber is expensive with labor and supple chain issues that come along with it. One mile of fiber costs anywhere between $24,000 – $50,000. The increase of precision ag activities has increased the need for rural broadband.

Tara Vance, Norton County Community Foundation: The Norton County Community Foundation was started in 1996 and has a story similar to many small community foundations, growing organically through bequests and special community development projects. Tara spoke about impact investing and the role it plays in their community foundation. Some community foundations structure it by a specific percentage of all investments is invested in a local business or project while expecting a small return. NCCF got into the impact investing space by investing in daycares, as it is critical need for their community. “Instead of investing in Wall Street we in invest in Main Street”, was a sentiment shared. The goal of NCCF to work towards developing non-profit leaders and inspire them to facilitate high-impact grants.

High Plains Mental Health Center: High Plains Mental Health Center is the community mental health center for all Northwest Kansas with 6 full-time offices, serving 20 counties, and plays the role of educating people on positive coping strategies in order to thrive. People can experience different levels of stress, acute stress, episodic stress, and chronic stress. Stress in agriculture has unique causes and stress due to unpredictability, high costs, commodity markets, weather, prices, and more. The center shared many warning signs, red flags, and rick factors to watch out for in friends and family to ensure their mental health. A resource the center shared is a training called Mental Health First Aid, which is an opportunity to be a service to our communities.

Rural Community Growth Panel: Hodgeman County Economic Development, Lincoln County Economic Development, and Grow Hays: The panel spoke about many challenges that rural Kansas experiences in the economic development space. Housing, daycare, dilapidated and aging buildings, and a smaller population for a tax base. A statistic shared was that before the pandemic, 1/61 jobs on LinkedIn was remote and currently 1/7 jobs on LinkedIn are remote, rural Kansas has a huge opportunity! When speaking of the level of urgency some of these projects need to become accomplished a quote that stuck with our class was, “I am 65 years old and I don’t buy green bananas”.

Sara Bloom: Hays Development Group: The Hays Development group shared the history of downtown Hays revitalization over the past thirty years. In the past downtown had always been a place for people to gather together and the town had lost that. “The Bricks” are now a place come to gather again! One of the key points to having a strong downtown is offering destination businesses. A quote that stuck with our class was, “If you aren’t an advocate for collaboration, you won’t be successful”.

Kansas Means Agribusiness: Allie Devine, Claire Gustin, Leigh Anne Maurath: The keynote speakers for this evening were available via Zoom at the historic Fox Theatre. The coalition was formed with Kansas Corn, Kansas Farm Bureau, Sunflower Electric, and Devin & Donley, LLC with the goal of supporting local innovation for growth. The group is comprised of realists, dreamers, and doers as Leigh Anne said. The group had a study done one what the gaps are in Kansas and what other organizations that make sense to align with. The research helped the group understand how competitive Kansas is as expansion and recruitment of agribusiness. The group reviewed existing program and policies and identified best practices to strengthen Kansas through marketing program and tax and regulatory policies. We will see results come from this group in the form of more agribusiness in Kansas.

Energy, Water & Natural Resources (Day 3)
Friday, February 11, 2022
Submitted by Jessica Ebert

A Growing Family Business–Alleah Heise, a family business consultant from K Coe Isom, came to tell us that growing a family business and talking about the hard stuff if possible and rural America is built on the back bone of a family business. It is time to discuss it.  64% GDP is family business.

There are four Family business life cycles to fit into. Survival – start up, struggle for financial stability. Financed by owners’ compensation or lack thereof. Stable – profitable for a number of years, growing, still owned by individual or couple. Net worth growth. Some offspring returning to business. Key employees. Professional – ownership spread to multi-gen siblings/cousins. Business growth, introduction of nonfamily management, establish policies, formalize roles. Institutional – mix of family/nonfamily shareholders. Family may not be involved in management; board of directors is governing body. Dividend Income.

The three-circle system in a closely held business is management, ownership, and family.  There is confusion and potential conflict if you don’t keep in the right circle. Where is the risk greatest for you and your operation? Differences and uncertainty are a big one. Where is the future direction: How should we grow? How much to invest or lose? How will we respond to change and pressure? There will be unexpressed expectations to face like behavior, work ethic, spouse or next gen involvement. Impact on the staff and approach to management.

Healthy businesses have healthy processes. Communication, Expectations, Agreements on vision, Understanding of business and management and concepts and strategies, and Comprehension of financial information. Communication in the family or in business or anywhere else it starts with listening.

When dealing with relationships there are 5 keys to effectiveness.  You need to have connection (commonality), integrity (respectful treatment), security (protecting), trust (will to share), and boundaries (mental, verbal, behavioral, and time).  You can use all of these 5 points to work through conflict with family and partners. You need to admit conflict exists and then you need to access the situation. Is it worth resolving? Ask the other party if they are willing to work on it.

When you are changing from operators to owners bring others along in the decision-making model. Reflection, mutual education, planning, and action by implementing the strategy and use the guiding principles. “Shifting your mindset, process is impossible without change and those who can’t change their minds can’t change anything.” George Bernard Shaw.

There needs to be clarification in the estate versus succession planning. Estate plan is the process of determining a plan to transition financial wealth from one generation to the next. Succession plans are the process of co-creating psychological ownership of the vision, strategy, goals, roles, decisions, performance and results of the business enterprise between two or more generations.

Letting go is a hard decision and succession concerns. The most common identified is financial security and is there enough money.

When navigating the challenges who will hold you accountable to the necessary tasks. You will need to have qualifying advisors if you go that route with have a board of directors to help hold you accountable. Fair is not equal.  Your potential board could be CPA, Attorney, Lender, Insurance Agent, and Wealth manager. The board brings you value. They treat the business like a business.

Leading a business is lonely and your networks are valuable.  There isn’t room for everyone on top of the first mountain. If you stay on top, others will stop climbing.  What is your second mountain? Your first mountain is raising a family, start, build, sell a business, focus on success, be recognized for accomplishments, achieve scale, accumulate wealth, be present and available.  The second mountain will be about enjoy your family relationships, start/build a charity, be elsewhere, give wealth away, achieve meaning, help others succeed, and focus on significance.

Michele Irsik-Flax, President Irsik Farms, Inc. – Standing Strong While Moving on! Family Business Transition is Possible!

Why? What is your story? Why stay together and keep the business going and not sell?

How? Asking for help it is okay really. Know your limits and seek professionals in the field. Aspire to be the best every day. Start early or just start now and invest in yourself.

You want to know your structure but be nimble, develop trust and the tell the truth always.

Leave a legacy and the next generation.  Communicate your mission and get out of the way. Don’t be afraid to evolve but stick with what works.

Doug Wareham, President & CEO, Kansas Bankers Association – Leadership Matters: Sustaining Local Access to Credit in Rural Kansas Communities.

Kansas Bankers Association (KBA) was founded in 1887 and banker driven for 135 years. The membership includes 209 of 213 banks head quartered in Kansas. 20 regional / national banks, 7 trust companies, and 112 associate members. KBA policy process is one bank is one vote. They have 36 people that work for him in Topeka.

Banking industry snapshot: 179 state-chartered banks in Kansas with $56,914,378,000 in assets. Regulated by the office of the state bank commissioner and federal deposit insurance corporation 37 are federal reserve member banks.

Ag Banks provide roughly 50 percent of ag credit nationwide. Small and micro loans to farmers.

What is fueling the consolidation flame? Regulatory burden and regulatory blindness – lack of tailored regulatory framework, rising costs for data security and fraud loss is now consuming 11 percent of bank budgets on average in 2020.

State and Federal income tax policy inequity. In the end we want community banks to survive so they can continue to serve their communities. Most federal bank regulators don’t understand community banking. We are pushing back hard against regulatory burden and blindness. We are opposing efforts to make private banks a financial police force.  Opposed to IRS reporting requirements and opposed bank reporting requirements for business ownership.

We are calling for exemption thresholds for community banks. We have started a Kansas Bankers consulting services side to help 125 Kansas banks manage their ever growing regulatory and compliance costs. Banks are the gold standard for cybersecurity and fraud loss costs.