Prepare for change or be an agent of change this year.

That’s the overwhelming theme from 13 leaders in the Greater Des Moines business community about trends coming up in 2018. The Business Record asked leaders from a variety of industries for two things: their forecast for what could come up in their industry or field in the next 12 months and the accompanying impact. They were also asked to include a “way too early prediction” for 10 years in the future.

In the baker’s dozen of responses included in this issue, the message of change resonated clearly — from the craft cocktail industry looking for policy change to data analytics and technology use in the transportation sector to the cultural shifts being experienced in workplace cultures and the artistic community.

The answers surprised and informed us, and we hope you enjoy the same experience.

Happy New Year!
Suzanne Behnke, Business Record editor

New allies develop for inclusive workplace cultures 

Trend: As the war for talent only intensifies, new allies will form to create appealing, efficient and profitable workplaces. 

Impact: IWLC looks at workplace equity through a gender lens. IWLC sees male allies as a critical and growing voice in the imperative to develop more women as leaders.  
 
IWLC research, as well as research from national organizations like McKinsey & Co., the International Monetary Fund, Ernst & Young and Catalyst, shows that having more women in the workforce offers businesses a competitive edge. 
 
McKinsey Global Institute takes it a step further, estimating that $12 trillion could be added to global growth by advancing gender equality. The companies that recognize this statistic also recognize men are, by and large, leading the culture that will invite that equality.
 
Current male leaders are creating a culture of gender inclusiveness not only because it’s the right thing to do; they also recognize it’s the smart thing to do. For example, Fortune 500 companies with gender balance consistently outperform those without. Thompson Reuters reported that average stock prices of gender-diverse corporate boards outperformed those with no women.  
 
The conversation is in the marketplace. For example, one CEO (Sebastien Bazin, Accor) wants to double the share of women in COO roles by 2020 and triple the share of women on the executive committee by 2018. He also pledged 50,000 male employees to commit to be HeForShe champions for gender equality. 

Way too early prediction: In 10 years …
Currently, Iowa women hold 25 percent of top leadership roles in private, for-profit companies. It’s even less, 22 percent, in publicly traded companies. IWLC has set a goal of 30 percent female senior leadership across the board by 2028. The creation of formal and informal male ally, sponsorship/mentorship programs will accelerate progress. Men will lead the charge alongside their female colleagues.

Tiffany O’Donnell
Chief executive officer
Iowa Women Lead Change 

Will craft cocktail creativity be set free in 2018?

Trend: The National Restaurant Association just released its annual “what’s hot” report. It’s always interesting to see what’s trending across the country and stack up Des Moines’ local culinary scene. 

Impact: Encouragingly over the past decade, Des Moines’ chefs and local restaurants have been on the forefront of what’s hot in food. This year, for example, street-food-inspired dishes and ethnic-inspired breakfasts have gained momentum on menus across the country. Both can increasingly be found in Des Moines hospitality establishments as well.
 
The ability to push boundaries on the culinary scene is made possible in part from increased access to both highly desired local ingredients and once hard to find nationally and internationally sourced ingredients. 
 
Is 2018 the year Iowa’s cocktail culture might enjoy the same privilege?
 
Iowa has some of the nation’s most restrictive alcohol distribution laws, making it extremely difficult for mixologists across the state to access the ingredients they need to create the trendsetting specialty and craft cocktails that can be found on menus in other states across the country. 
 
This is frustrating to the state’s mixologists. The No. 1 trend in adult beverages across the country is culinary cocktails, followed closely by on-site barrel-aged drinks and then regional signature cocktails. But access to product and restrictive infusion rules stifle creativity in Iowa. Instead we are stuck with chemically enhanced flavored alcohol, such as birthday cake vodka.
 
Craft cocktails could be an integral piece of the sophisticated entertainment and cultural mix that Des Moines has been developing for the past 20 years.
 
The Iowa Department of Economic Development and the Iowa Alcoholic Beverages Division have spearheaded a working group along with industry members to try to amend some of the most antiquated systems, regulations and laws that limit access to specialty and other products to stay competitive with neighboring states.
 
If that happens, a craft cocktail renaissance in Iowa’s hospitality scene will be set free. And that’s good for businesses and patrons alike. Just look at what happened to the local craft beer scene once the regulations were changed to allow Iowa breweries to compete with the rest of the country. 

Scott Carlson
Owner/operating partner
Court Avenue Brewing Company/Americana/Gilroy’s

Interest, use of independent sources of energy grows

Trend: As the prices of solar installation and energy storage decrease, businesses will increasingly look to these technologies to provide energy independence and security.  

Impact: While Iowa has fairly low energy costs, businesses (and individuals, for that matter) are becoming increasingly aware that energy security is an issue that will drive them to look for ways to protect their operations and/or provide essential services in the event of a natural disaster or cyber event of some sort. This trend is driven by nearly daily news reports of floods, fires, hurricanes and tornados, which wreak havoc on the ability of the public and private sectors’ ability to provide essential services. Iowa’s recently adopted Iowa Energy Plan, http://iowaenergyplan.org/docs/IEPExecutiveSummary.pdf, recognizes the need for electric system modernization to provide these protections.   
 
All of these factors are driving the desire for development of more distributed energy resources (DERs) in Iowa, and for these DERs to be renewable. It is fair to say that a majority of Iowans — individuals and businesses — desire not only a secure energy future but a clean one.   
 
Accordingly, development of DERs increasingly will be driven by commercial and government entities who desire not to rely totally on traditional utilities for their energy needs.

Way too early prediction: In 10 years …
As a result of a major natural disaster or cyber event that impacted a significant part of the electric grid, government and private sector entities that provide essential services, as well as private businesses, will have constructed microgrids that will enable them to “island” themselves away from the traditional utilities’ electric generation and distribution systems so that they can continue to provide those essential services and operate their businesses, respectively.

Sheila K. Tipton
Head of the Energy Practice Group
BrownWinick Law Firm

The future of Des Moines arts: innovators, collaborators, makers, rule breakers

Trend: Artists have long relied on mainstream conduits to share their work: galleries, promoters, public venues, publishers. That model is shifting into one of communal, symbiotic creation and identity. The Barnum Factory and other artist collectives disrupt the traditional to bring art to every person — not just a few who can afford it.  

Impact: Michael Watson is a photographer at Barnum; he’s obsessed with documentation. Abandoned houses, professional wrestling, portraits. “I don’t become a part of the scene — that feels invasive. I’m more interested in what lives have been lived here.” That’s his approach — let it be, but record its life.
 
Heidi Wiren, one of the first artists to exhibit at Barnum, creates woman-centered multimedia works that “illuminate the overlooked and forgotten.”
 
Her Barnum exhibit included a life-sized ice sculpture wrangled into the building an hour before the performance in 100-degree heat. It survived the show, then melted away overnight. Collaborative art space is always shape-shifting. 
 
Wiren has lived in several artist communities. “The heart and soul of Barnum is Breanne and Aaron; they make the space what it is. They’re curating humans they love and trust, who really work well together.” 
 
But as Watson says, “With that freedom of, here’s your space, here’s your ball, run with it.”
 
Art collectives will continue to spring up around Des Moines, as artists seek to make more meaningful connections and engage with the communities in which they’re immersed.
 
The Barnum Factory is a beautiful Frankenstein composed of lots of individual pieces; it is very wise, and has a huge heart. It’s an evolving collaborative space that reflects the metamorphosis of the unique artists who touch it, create in it and embody it. We’re proud to be part of that momentum.

Way too early prediction: In 10 years …
The boundaries among collaborative artists will continue to dissolve as screens become obsolete and makers build via hologram and virtual reality. Spectators will become part of the creative process, participating in visual, musical, literary and performance art in the open space around us. 

Breanne Barnum
Co-founder
The Barnum Factory

Websites study users’ habits to hone SEO

Trend: How visitors interact with websites is becoming the most influential factor in search engine optimization. One of the most influential trends in digital marketing is the growth of website behavior metrics. These days, the way users interact with your website is having much more influence on search engine optimization (SEO) and, ultimately, the success of your online presence.

Impact: Google’s entire purpose is to provide its users with quality content that will answer their questions and present the information they seek. In order to provide the best results, Google watches how users interact with websites. The search giant keeps tabs on nearly everything users do on your website, including which pages they view, where users are located, and how much time they spend on each page. This information is used to determine where each page should be placed in rankings.
 
For instance, imagine your website has a page with fantastic content providing an average session duration (the time a user spends on a page) of seven minutes, while your competitor has a similar page on which users are only spending 30 seconds. Google is likely to notice this, assume your page has higher quality content, and give it a better ranking in search than your competitor’s page.
 
While Google used to rely primarily on backlinks and keywords as ranking factors, website behavior metrics have become highly influential in the last few years. Web page session duration typically serves as the most influential behavior metric driving SEO efforts. This trend will continue to grow in 2018.
 
As the general quality of websites continues to rise, so do user expectations. Websites that focus on providing a clean, mobile-friendly user experience with a vast offering of original, quality content will experience the greatest success in SEO.

Way too early prediction: In 10 years …
Google will monitor each user even more closely via hundreds of everyday devices connected to the internet. It will predict the information or service that will be most useful based on the user’s mood and situation, then provide it before a manual search is performed. 

Drew Harden
President and co-founder
Blue Compass

Welcome to the age of artificial intelligence

Trend: If recent advancements in voice recognition technology are any indication, we have reached an age of artificial intelligence. Voice command devices (or voice-enabled assistants) can turn on lights and relate the latest news when commanded, and smart home devices can detect and learn your behaviors at home and mechanically adjust the temperature in your home to match your habits. Artificial intelligence has arrived, whether you’re comfortable with it or not. 

Impact: For farmers and agricultural producers, AI is no stranger. Agtech startups from the Silicon Valley to the Corn Belt are developing AI innovations to help make agricultural operations more efficient. Even larger agriculture companies are acquiring and investing in AI — moving the needle from traditional farming methods to autonomous equipment and machine-learning systems and apps for precision farming. The reason? Several variables affect farming operations and their bottom line. Uncontrolled elements such as the weather, weeds and insects in crops, and animal diseases that inhibit livestock producers also affect the success of agriculture operations. In turn, Agtech companies are designing AI tools to help predict, detect and plan for such elements.
 
While there will be challenges that arise with adaptation of more advanced AI tools on the farm, the impact for farmers and producers will be significant. The rise in precision agriculture practices will be even further advanced by an increase in autonomous equipment. Autonomous tractors remotely measure nutrient deficiencies and moisture issues in the soil and provide real-time data and recommendations to farmers to help mitigate problem areas before they affect yield. Facial recognition systems monitor food intake in livestock, and behavioral monitoring systems can now determine the best time for artificial insemination to breed livestock. 
 
AI has a significant role to play in the agriculture industry. And Agtech companies will make strides in the coming years to ensure these innovations provide remarkable accuracy, immediate data and solutions to make farm operations more efficient and profitable.

Way too early prediction: In 10 years …
The agriculture industry will adopt a larger presence of autonomous machinery “learning” the land and supporting farming operations in the field. The next generation of farmers will spearhead this effort — the Generation Xers and millennials who brought innovative AI technologies to the farm and will advance to the early majority, bringing more technology to the farm as baby boomers begin to retire.

Megan Vollstedt
Executive director
Iowa AgriTech Accelerator

Instant data help make instant decisions in transportation

Trend: Shared transportation data are becoming a key part of our transportation infrastructure.
 
The general trend toward data integration and analytics for business and system performance, and the adoption of transportation systems management and operations principles, are driving transportation departments to explore the data needed for a highly effective transportation system. 

Impact: For many years the physical attributes of road infrastructure were the dominant factors that governed flow, capacity and safety. However, the ability to collect and openly share precise, real-time data about the road system across a broad range of providers and users can make data as functionally important as physical infrastructure. Digital mapping; real time analysis and communication of incidents, obstacles, events, flow and conditions; and real-time feedback from operators and vehicles give users and vehicles the opportunity to not just see or sense where they are and under what conditions, but to know ? and to also see and know “beyond the horizon” to make better, safer operating decisions. It also helps us make better operational and asset management decisions ? we’re very actively exploring these concepts, not just in the autonomous vehicle proving grounds in the I-380 corridor, but in operational and project activities throughout the state. I call it data as infrastructure because it can improve flow, capacity and safety without adding lane miles.
 
Autonomous and connected vehicles and the question of how we can support and interact with them add some urgency (and opportunity), but it’s not the only thing driving this trend. Again, increased focus on operations and the opportunity to help humans make better operational decisions also drive it. Pursuing this trend requires that we address a number of issues, such as data content and governance, open exchange standards, network access, security, privacy, and consistency of data and access across jurisdictions. But the opportunity is worth the effort ? 94 percent of all traffic crashes are caused by human error or choice.

Way too early prediction: In 10 years …
In 10 years, physical identity/privilege cards (for instance, driver’s licenses, library cards, fishing licenses) won’t be necessary. Electronic identity profiles secured through biometrics will govern in-person and electronic access to public and private services, benefits, privileges and controlled places with better security, integrity and convenience.

Mark Lowe
Director
Iowa Department of Transportation

Human performance-based design for work space

Trend: Working environments designed with a focus on human performance being equal in importance to building performance. 

Impact: More and more employers are expanding their focus on the health and productivity of their employees and staff and are seeking work environments that produce measurable metrics of human performance. 
 
Workspaces will need to continue to be creatively designed to improve the well-being of staff, resulting in reduced absenteeism, increased productivity, and improved recruitment and retention by providing an environment that results in a flexible, healthy and optimistic workforce. Employers will seek design professionals with experience in providing these human performance-based environments ? projects that provide measured metrics that document how the work environment advanced their business through a healthy, motivated and successful staff.  
 
Flexible workspace with a variety of work environments for a mobile and adaptable team will continue to be provided, but employers will also reconsider the importance of real-time interaction and socialization in the workplace and will empower a team environment by providing creative space to encourage a re-energized workplace where staff can physically connect. And equally as important, employers will more thoroughly measure human performance.
 
Way too early prediction: In 10 years …
Technology will never replace the spontaneity, richness and allure of a hand-drawn sketch or diagram to communicate ideas, but technology will provide a platform that allows a designer to “think” an idea that can be virtually shared. All industries will acknowledge and address the importance of daylight and views on human health and move away from the windowless spaces often provided for the most important aspect of their business ? people.

Rod Kruse
Principal
BNIM Architects

Medicaid and managed care

Trend: Ongoing changes to Medicaid. 

Impact: The health care industry trend that we anticipate will most significantly impact Broadlawns Medical Center and other health care providers throughout Iowa in the coming year is the shifting coverage and reimbursement rates for individuals who rely upon Medicaid.  
 
With ongoing changes to managed care coverage and the potential elimination of the Affordable Care Act, traditional safety net hospitals, like Broadlawns Medical Center, will bear greater responsibility for absorbing costs related to underinsured and uninsured individuals.  

The provider coverage, service reimbursement rates and preauthorization processes for the respective MCOs vary based on the carrier. These variances impact health care providers, but they also significantly impact the individuals and their out-of-pocket responsibility. With potentially reduced options for medical, dental and mental health care coverage, individuals may be faced with identifying new providers in order to continue receiving coverage for health care services.  
 
Broadlawns Medical Center remains committed to ensuring that individuals have access to high-quality health care, regardless of their ability to remit payment for services rendered. As the safety net hospital for Polk County, we are dedicated to addressing unmet health care needs, specifically for services such as mental health and dental care where there is a shortfall of available access for at-risk individuals within our community.  
 
Healthy individuals are productive individuals. Ensuring access to preventive health care is essential to the overall health and well-being of our community.
 
Way too early prediction: In 10 years …
The administration of Medicaid will return to the individual states in the form of a block grant that would return Medicaid to a program similar to the Iowa Cares program. This would potentially create fewer options for providers and access to health care services.

Jody Jenner
CEO 
Broadlawns Medical Center

Data will be an even bigger double-edged sword 

Trend: Big data changing insurance business models. 

Impact: Companies can better anticipate customer needs, protect against attacks. 
 
In 2018, data will play an even larger role as both a business opportunity and a security threat. Data are driven by technology, which is revolutionizing the insurance industry through predictive analytics, on-demand insurance, mobile platforms, autonomous vehicles and drones, to name a few.
 
The proliferation of big data’s integration into personal and business settings has added enormous complexity to business models of insurers. In fact, the National Association of Insurance Commissioners recently established an innovation and technology task force to monitor technology developments in the industry and consider whether new rules are needed governing the use of data.
 
With greater data availability and progressions in analytical capabilities, insurers can achieve better risk management and greater control on profitability and enhance the customer experience by leveraging data at a granular level. As a leading retirement services company, Athene uses data to continuously evaluate our service models and to ensure we are appealing to data-savvy customers. By anticipating their needs and expectations, we can be positioned to provide customized content and solutions aimed at addressing those needs.
 
Using big data promotes better detection and security, making it possible to capture real-time activity and detect anomalies or fraudulent behavior before any harm can be done. Analytics provide a deeper understanding of potential vulnerabilities so companies can tighten their security against future attacks. Cybersecurity threats will continue to emerge, which is why protecting the security of information our customers entrust to us is a priority.
 
Big data are truly changing the landscape, requiring a careful blend of people, process and technology to pull the right insights, at the right time, to generate actionable decisions.

Grant Kvalheim
President
Athene USA

A reason to say, ‘Yes!’

Trend: Central Iowa colleges and universities create thousands of talented people. We need to give them a reason to say, “Yes!”
 
Workforce attraction continues to be a challenge across our country. The Ames Chamber of Commerce is bullish on workforce, which is why we conduct job fairs for our industries, have developed an extensive internship program for Story County interns called See Yourself in Ames, implement Home Base Iowa, and are constantly pursuing other best practices to satisfy the workforce needs in our part of Central Iowa.
 
One segment of our community that we must continue to court is the large number of college graduates in our region seeking that first job.

Impact: The Ames-Des Moines region has an abundance of people seeking their first professional employment opportunity. They hail from terrific institutions like Des Moines Area Community College, Drake University, Grand View University, Iowa State University, along with many more that touch the Ames and Des Moines metropolitan statistical areas. 
 
With thousands of graduates leaving college campuses annually, it is imperative that our communities give these people a reason to say, “Yes.” Frankly, the jobs are abundant, and it is incumbent upon community leaders to work together to create the amenities and housing options that will keep them here. 
 
Here in Ames we work closely with interns at local companies showcasing all the Cultivation Corridor has to offer. The Greater Des Moines Partnership does as well. We are fortunate to have the opportunity to interface with these graduates, which is why we continue to find ways to interact with them in a variety of settings. Yet we are promoting livability more than ever because the graduating student population recognizes our marketplace as a jobs center.
 
With young people seeking livability as much as the job, it is essential that we continue to nurture investments in parks, trails/trail connections, cultural amenities, cool gathering spaces, reasonable housing options and more to give them a reason to say, “Yes!”  

Way too early prediction: In 10 years …
Light rail will connect Central Iowa. You can live in downtown Des Moines and be to work in Ames at the Iowa State University Research Park in 15 minutes or live in north Ames and be to work in West Des Moines in no time. Going to the Iowa State Fair and wondering where you will park? No big deal. Simply take the light rail to Des Moines and then hop on an autonomous, of course, shuttle to the fairgrounds.  

Dan Culhane
President and CEO
Ames Chamber of Commerce

Meeting banking customers where, when and how they want

Trend: Data and digital disruption will continue to drive banking innovations. 
 
Impact: Banks of all sizes are faced with the reality that today’s customers have changing expectations. Here’s how we see this shift impacting the banking industry:

Anytime, anywhere banking: According to a recent American Bankers Association survey, 66 percent of consumers prefer to do their banking online or on a mobile device. We expect this trend to continue in 2018 and beyond. Banks must continue to make investments that create an easy, engaging and secure internet and mobile banking experience for customers. Bankers Trust, for example, is making it easier for customers to set up, manage and keep their accounts secure using mobile devices. At the same time, we expect continued strong use of ATMs and brick-and-mortar branches. The next year or so will bring innovations in these areas, too, with cardless ATMs within our expanded ATM network, and branches built or redesigned so that bankers can serve customers in the lobby, in private offices, at kiosks, etc.

Data-driven solutions: Commercial and consumer customers alike trust their banks with a lot of information. Data analytics enables banks to organize that data, look for patterns and trends, and then act quickly and accordingly to create and offer solutions that meet customers’ specific needs.

Security: With more and more people banking online and via mobile devices, banks will continue making strategic investments in the technology and resources that help keep bank and customer data secure. At Bankers Trust, we will focus on introducing more sophisticated ways for customers to verify their identities and access their accounts, including soft/virtual tokens for our commercial customers, and expanding biometric authentication, which relies on unique biological features of an individual to prove they are who they claim to be. We will also introduce additional options for customers to set spending controls on their debit and credit cards, among other efforts.    

Way too early prediction: In 10 years …
Technologies such as geolocation and biometric authentication will become even more commonplace. We imagine our customers 10 years from now won’t need to remember passwords or carry debit or credit cards. Instead, fingerprints, facial recognition and/or eye scans will offer increased security and be connected to various payment mechanisms.

Don Coffin
President and CEO
Bankers Trust Co.

Don’t let the bull fool you

Trend: The bull run is providing a false reality for investors  … don’t forget.
 
Impact: The stock market has been on an incredible and unprecedented bull run. Alan Greenspan once warned of “irrational exuberance” as it related to the dot-com bubble of the 1990s, and it may be time to dust off this warning. We have an entire generation of young professionals that have never known a down market and many of whom will be drastically unprepared when the market correction takes place. It’s easy to see why with absolute blockbusters like bitcoin, Tesla, Amazon, Netflix and Facebook. 
 
This success has led to a false sense of security that is leading people to take on substantially more risk than modern investing theory says they should. I am seeing a trend where clients want to move into 100 percent equities because they don’t want to “miss out.”  While this strategy may be a short-term winner, in the long term it may very well prove disastrous. The need for real-life dialogue and thought leadership has never been greater and at the same time the perceived need for that leadership is very low. 
 
The next and less obvious issue when there is an extended run in the market is the thought that we can “invest” our way to long-term financial security. Higher-than-average returns today are creating poor savings habits and unrealistic expectations for future returns. The developing thought process is that we can save less because we will continue to experience above-average returns. This is simply not the case. Investors are not rich due to good luck and high returns; their success is the result of good systematic savings habits and long obedience in the right direction.   

Kalvin Grabau Keele
Wealth management adviser 
Northwestern Mutual