Effective Public Engagement – 3rd in a series of 5 posts

Old-School-GovernmentFighting a government threat is a lot like any important undertaking involving any constituent group. To be effective, you must first seek to understand before you work to be understood (this is a key takeaway in my book, Building a Winning Business). That’s why my first lesson is (1) Pay close attention to the issues and government proposals before they become laws!

It takes time to read newspapers and to follow the many proposals that are described, particularly at the beginning of the legislative season. If you don’t have time to personally monitor the political landscape, engage a professional to do this on your behalf (larger companies have public affairs teams in house who routinely do this important work). Don’t take a blasé approach to a potential threat in the early stages because the best time to influence a legislative outcome is before a proposal becomes a law.

Part of understanding proposed legislation should include an appreciation for what a politician is seeking to accomplish. Thus, my lesson #2: Seek to understand both sides of the issue so you can provide a reasonable, balanced perspective.

In the recent B2B debate, the Governor was clearly concerned about the long-term viability of our state. He repeatedly stated the need to make sure every single Minnesotan is prepared for the future with a solid education. Those are goals I, and many in the business community share.

This also explains why lesson #3, “Work to document your company’s contribution to the local community,” is so important. We need to prove that we have “skin in the game” when discussing what is best for our businesses, employees and the communities where we operate. During the B2B debate, we gathered information about where our employees live, how much we contribute in taxes and charitable contributions and other key data. This was woven into my articles and into direct conversations with members of the Minnesota State Legislature.

Next time: lessons 4-7

standardMay 4Tom SalonekTaxes

Effective Public Engagement – 10 Guidelines

The-WhitehouseAs I mentioned in my previous post, Fighting a Government Threat is both an academic case study topic in the March 2013 issue of Harvard Business Review and is a subject that is quite personal for my company. In this and several upcoming posts I will share lessons learned from my own engagement with governmental leaders, as well as recommendations from the HBR case study of the same title.  So, without further adieu, here are my Top 10 Rules for Effective Public Engagement:

 

 

 

  1. Pay close attention to the issues and government proposals before they become laws!
  2. Seek to understand both sides of the issue so you can provide a reasonable, balanced perspective.
  3. Work to document your company’s contribution to the local community.
  4. Engage your employees in the public debate as much as possible.
  5. Don’t be afraid to take a position and speak out about it.
  6. Don’t make idle threats.
  7. Try to offer reasonable ideas/counter proposals that both parties can live with.
  8. Don’t assume that your counterpart thinks the way you do or is influenced by the same consideration.
  9. Work to find points of convergence and show empathy for the goals of the Governor or legislators with whom you have a disagreement.
  10. Build a positive relationship with the news media over time.

Next post I will take a closer look at items 1-3.

standardApril 20Tom SalonekTaxes

Effective Public Engagement

Little-Dog-Big-TeethMounting debt, increasing costs and a shrinking tax base have left many leaders at all governmental levels struggling to balance budgets and maintain service levels expected by constituents. Unfortunately, many politicians push tax increases as an almost knee-jerk solution, ignoring the negative impact higher taxes may have on businesses and consumers alike.

A recent case study in Harvard Business Review (HBR) entitled Fighting a Government Threat takes a close look at this scenario and provides commentary by Andrzej Klesyk, CEO of PZU Group and Michael Hartman, senior vice president of legal and regulatory affairs, DirectTV Latin America. The HBR article and commentary combined with the recent debate in Minnesota over the Governor’s proposed tax on business-to-business services, has inspired me to write a series of posts on the topic of Effective Public Engagement.

As you undoubtedly know, Governor Dayton’s proposed B2B tax ignited a firestorm in the local business community and, ultimately, the Governor chose to withdraw his proposal. I appreciate his willingness to listen and respond to the sincere concerns of small- and medium-sized business owners, as well as the CEOs of Minnesota’s largest companies, all of whom weighed in on this hot topic. I was among those participating in the debate and was gratified when the Star Tribune chose to publish my OpEd on the topic Taxing business services is bad for Minnesota.  I also was quoted in a related column by Star Tribune reporter Neal St. Anthony.

What can businesses like mine learn from this recent episode? There are a number of lessons, which I will share in my next few posts on this topic. Some are drawn from the HBR case study I referenced above and others are based on my own legislative debate experiences. I hope you will weigh in with your thoughts, questions and recommendations too!

Up next… 10 rules for effective public engagement.

standardApril 11Tom SalonekTaxes

The Cost of Business in Minnesota

Cost-of-Business-in-MNThe following was written by Brianna Harrington of Intertech.

Governor Mark Dayton’s administration claims its new tax proposals could raise more than $2 billion in new revenue in the upcoming budget cycle.

While the tax could help to eliminate the 1.1 billion dollar deficit, it assumes businesses can financially shoulder the burden of a compounding tax, which makes them less competitive today and moving forward.

Last Friday, Dave Brenner, a senior manager at Intertech, met with legislators Sen. Roger Chamberlain, Rep. Matt Dean, and Rep. Linda Runbeck and 15 other concerned business members at a round-table discussion in Vadnais Heights to discuss the proposed tax increases.

The businesses represented ranged from small mom and pop shops to large enterprises with clients from around the world. Unsurprisingly, many of the business owners raised the same short-term and long-term concerns.

A small trucking company shared its frustration in adding to the financial gridlock because of an uncertain future.   To grow his business, he needs to purchase another truck, but at a cost of over $100,000 he has to hold off until he knows how he’ll pay for the additional taxes.

Another company expressed that a 5.5% cost increase with their already thin profit margins will completely curtail their ability to pay down operating loans, invest in new products, and will make their long-term competitiveness unobtainable.

A local businessman explained if the law passes he would be faced with the tough decision of having to cut their workforce, move employees to part-time, or move their location. With plenty of bordering (and non-bordering) states already reaching out to businesses unwilling or unable to take on the new tax burden, he expects many companies to be in the same position.

Issues were also raised on the claims corporate taxes will go down. While large corporations may see a decrease, the majority of businesses, companies that are filed under sub-chapter S (as well as LLC’s), will see a 25% increase in taxes (from 8% to 10%).

A native Minnesotan shared that he has already had to co-locate his business due to taxes. He currently lives in MN, largely for personal ties, while his offices are located in Hudson. However, with the tax hikes on the horizon he feels he’ll have no choice but to completely relocate to Wisconsin. “It just makes more financial sense.”

Finally, the MN business-to-business tax favors large companies able to offer in-house services such as accounting, legal, or design; yet another disadvantage to budding businesses.

I agree with Gov. Dayton, that, “No one likes paying taxes.” but the compounding cost of the taxes proposed, creates an almost hostile environment for businesses to flourish in Minnesota. Add that to the lack-luster appeal for new businesses and the potential brain drain to our vibrant business community and you’re left with a devastating long-term impact.

standardFebruary 26Tom SalonekTaxes