Photo by Kayleigh Omang
* This article is a portion of the interview between Governor Burgum and Mike Dragosavich. Follow us on social to see the full version. The Interview was conducted on March 4, 2020, prior to the heat of the COVID-19 Epidemic.
After three full years in office, Governor Doug Burgum has a lot to say about business in North Dakota. Spotlight’s owner and CEO Mike Dragosavich sat down with the Governor and successful businessman to use his unique perspective as a serial entrepreneur to learn more about what is going on at the state level that directly affects our region’s small businesses.
Very early on I didn’t have a lot of money and I bootstrapped my company. I would constantly search the web looking for ways to succeed.The problem today though, is that it’s paralysis by analysis. We don’t know where to look, it’s hard to find. Now, the web is so oversaturated, where do we go to find these things that can help us? I have always seen the value in looking and supporting what the state and the federal government are doing for small businesses and it’s there, it’s just hard to find sometimes. And so with this article, in this interview, we’d like to shine the light on some of those things. When you’re putting yourself in the small business owner’s shoes, right now, what are some of the things that make you excited? What are some of the things we should pay attention to? What are some thoughts on that?
For three decades or more I’ve been involved in trying to hire team members, attract capital and grow. Those were things that I was doing in the private sector and that’s something I’m doing now at the state level. What’s different is, right now, the economy has been so strong in our country, this is the first time in the history of the nation where there are more jobs available nationally than there are people seeking jobs. And, in North Dakota, we’re perennially one of the lowest states for unemployment in the country. That used to be kind of a bragging point among states, who’s got the lowest unemployment because it was a sign of economic strength, but then that low unemployment creates a workforce shortage, whether it’s you or any of the listeners today that have got open positions. When I talk to groups of people and say, “How many people have got open positions?” Every hand in the room goes up. So then, how do we create that workforce? That leads to a whole set of things or some things that the government can do from education and skill-building and programs.
Then, there’s the question of what does the small business owner have to do? And the small business owner has got to be better than ever, because you’ve to create an environment where people want to work. The kinds of stuff you’re doing here, creating great culture, making sure that there’s purpose to the work that people are doing, because people today, if they’ve got skills they can work anywhere. They can work anywhere geographically; within that geography, within a city they can probably work at five or six different companies. So, as the business owner, the competition for workforce is one of the hardest things. That’s where, before you can go start fighting for customers, you’ve got to figure out how to get the workforce. And again, I think it starts with a clear mission, a clear purpose, the right kind of culture. And that was again, something that we understood and we worked really hard to get ourselves on all the “best places to work” lists, because we knew that was one way to get a leg up on trying to attract the team members you need to be successful in a competitive marketplace.
Important Business Resource
Legacy Investment for Technology (LIFT): an innovation loan fund aimed at accelerating applied research, experimentation, or operational testing within North Dakota’s targeted diversification sectors. This fund provides low and no-interest financing.
So, that’s a real hot topic obviously. And when we think about it, for me, there are levels to that.There’s HR, recruitment, retention, we’re thinking about it constantly. One of the things I feel like I should do, if I have an issue around that, is start with the state. Because there are job boards, there’s Job Service, there are programs, there are initiatives, right? We should start there I think. And that’s what I would like to start learning how to do better. So, what have you done with your team or what will you do in the future to make it easier for people like myself? When I have an issue or an idea and opportunity in my business, I should just start with the State of North Dakota and the resources you have. Are you working on the website? Are you working on ways that make it easier for us to have an ambassador? Where do we start?
You’re talking about the interface, because the job creation has to start with the entrepreneurs, the innovators, the business owners, like yourself. Private sector creates the jobs, not the government. The government can’t take credit for your success. You built this thing, we can’t take credit for any of these, but we can help and we can be a resource. And one of the things that we can do at the highest level is try to get people to move to North Dakota versus other places. What can we do to make sure we’ve got a regulatory environment where we’ve got low taxes and great cities to live in? Those kinds of things get people to want to move here in the first place, so, there’s a pool of candidates for you. Then within that pool, they have the right skills. Do we have the right kind of programs and certificates, can we keep them? If they need a license to practice in North Dakota, if they’re a nurse, a teacher, a plumber, can we get the regulatory licensing down so they can move here as opposed to having barriers to be here. So, those are all things that the state can do. But in terms of the place we’d love to have people go, the place to go is the North Dakota Department of Commerce. That’s the entry point for us supporting business growth and entrepreneurs in the State of North Dakota. And job service, another key one. As you say, we’ve got a place to post and look for jobs and then of course, workforce safety. Because, as a state, the only place you’re required to get workforce safety insurance is from the state-owned insurance company called Workforce Safety & Insurance, but it’s an interesting thing where the state provides it, but our rates are lower than anybody else in the country.
We’d like to think our service is as good or better than anyone else’s in the country and, again, it lowers the cost of business, particularly for small businesses. So, we’re trying to make sure that we create an environment where we can attract people to come here and have the skills here and have very few barriers and, then, if someone like you wants to get help, you know where to go and we can start with the North Dakota Department of Commerce. Through that, we’ve revitalized our whole statewide workforce initiative. There was a task force that had gone defunct that we revitalized. It’s got legislators, it’s got business owners, it’s got people from labor and industry. And that group of 32 business leaders across the state has come up with an entire report, which then is leading to changes that we can make to help the government get out of the way.
Important Business Resource
ND Career Builders Scholarship & Loan Repayment Program: Is aimed at attracting people into high need and emerging occupations in the state. Employers can contribute dollars to match the investment of the state while filling the workforce needs and helping employees reduce their student loan debt. The program has a lifetime maximum of $17,000, and recipients have the obligation to reside and work (in a high need or emerging occupation) in North Dakota for at least 3 years following program completion.
So, I did my research. If you’re a business owner and you’re trying to help attract people to come to this area, there is a website called Experience ND that has some really nice resources that you can share. There’s the task force. And just to keep in the loop with those 32 business leaders and just seeing what their analysis is and just staying in the loop could really help us maybe predict some trends and things with our own business. Like the workforce safety, you wouldn’t think as a small business owner to even go there.
It’s like insurance, you only go there when you need it. But I told you, I went there and I found $5,000 I saved because they ran an ergonomic chair health grant that we were able to capitalize on and it saved me really big money at an important time in my business. So, the point is, this is cool. You’re focused on the high-level infrastructure of all of it, but if we can team up and get everybody to realize there are easy ways to find these things.
On that last one. We just got another $800,000 at Workforce Safety & Insurance where if somebody calls them up, Workforce Safety & Insurance, they’ll send an ergonomic specialist to your business, look at your workplace and go, “Here’s the changes that you could make. We may even have grants to help you invest.” Like you said, chairs or standup desks or something. We’re trying to reduce having to pay carpal tunnel surgery 10 years from now by giving people the right ergonomic environment today. From the business people, sometimes people say, “Oh, that’s not the government’s job to do that. Well, it’s my job as a business guy, leading the state, to figure out if I spend $1 today to save $20 of taxpayer money tomorrow, I’m going to spend the dollar today.” So, this is one of those programs where by investing with companies, we can help avoid a bunch of healthcare costs downstream for the state or for the employer and your employees. Your team members are happy and they’re healthy and that’s part of what we have to work together to do.
Important Business Resource
Emergency Solutions Grant Program and the North Dakota Homeless Grants: In this time of need, it’s important to remember the Emergency Solutions Grant (ESG) and North Dakota Homeless Grant (NDHG) programs that can provide rental and utility assistance, deposit assistance, and shelter operations for agencies and citizens in need. ESG and NDHG funding is provided to 31 agencies across North Dakota, represented in all 8 regions of the state.
The last time you were on the cover of our publication, you were talking about what you were looking to do as governor and it was really a great conversation. A lot of it was around broadband technology so that more people at the garage could be e-commerce specialists and bring revenue to the state. There was a lot of conversation around smart towns and infrastructure. If you reflect on the four years of being governor, what are some of the positive things you’ve seen that relate to business owners that you’ve seen happen?
Main Street Initiative Community Engagement Metrics Since 2018
Communities Engaged: 75
# MSI Proclamations: 30 (40% of MSI communities; 52% of visited)
% of total ND population engaged: 86%
% of eligible population engaged (within city limits): 87%
Well, I think some of the things you mentioned that we talked about back when we had just announced that we were running. Some of those became the foundation of what we call the Main Street Initiative. And the Main Street Initiatives has three pillars. The first one is workforce, which we’re already talking about because we can’t achieve our potential unless every business owner gets a chance to hire quality people. There’s actually, we think, over 30,000 jobs available in the State of North Dakota right now, which is a record number of jobs. And some of those we’re going to fill because we’re bringing in people and graduates, but some of those jobs maybe need to be replaced by automation. If somebody is short of having 20 welders, maybe what they need is two guys that can program a robotic welder and the state could be doing even more in terms of providing tax credits for automation.
There may be ways where we reduce the number of jobs because we’re automating and bringing in IT and advanced technology because, again, that kind of increase in productivity would be great for the bottom line of a business and we should be supporting that. So, workforce is one pillar. The second pillar has to do with building healthy vibrant communities. Drago, you’ve been so engaged in helping create Fargo into a healthy vibrant community. And I know that when people are recruiting people to come here, even if their business is out on the edge or it’s in the industrial park or it’s a small business in a strip mall, they bring their team members downtown and say, “Hey, this is a great place to live, look at all the fun things that are happening here.” And so we know that when we’re competing against other states and other communities, that having that vibrant core, that sense of community, that tech or entrepreneur or small business ecosystem matters. And people like you are making a difference on that and we want to support that.
We’re supporting education, we’re supporting with Main Street grants, we’re supporting with all kinds of things — getting the arts involved — so we end up with these communities where people want to live, work, play, get an education, raise a family, all of that. And then the last one, is smart infrastructure. Yes, we need roads and bridges for the physical economy, but we also need high-speed broadband for the digital world that we’re in. So much of what’s going on today is maybe crossing over between the analog and the digital world. But North Dakota shows up well on all the national surveys, that as a rural state, we’re among the top in having the best broadband. But we’re not there yet. When I think about the things that are going on at Grand Farm or with your farming publication, in all the advanced precision agriculture, it’s not good enough for us to have a gigabit to every school building in the state.
That’s great. But we need to get it to every combine, every tractor, every rancher on a horse with a smartphone. We’ve got to get it literally everywhere, which means that last mile we’re going to have to have wireless because we can’t wire every truck and every machine and every car. We’ve got to have wireless high speed. And part of that then feeds into the things like the whole burgeoning unmanned airspace work that we’re doing with the unmanned aerial systems, with a vision of being the first state in the nation having an air traffic control system where we can have UAS flying around with manned and unmanned — remotely piloted with human-piloted. The airspace in America is the safest airspace in the world. The FAA wants to keep it that way. And so to do that you have to have very sophisticated systems that detect and avoid. If we’ve got drones flying around with other planes, the whole nation is going to need that. We’re becoming the test site for that because we’re building it out.
And if we build out the first air traffic control system for drones, we’re also going to have amazing cell service on the ground. These things go together because we can be among the most wired states and that can help us with everything from flood protection, having better understanding of what’s going on with weather and severe weather events. Having more instrumentation across our state will be amazing and we’re on the front edge of doing that. And then how does that tie back to a small business owner? When we’ve got that infrastructure — the infrastructure of roads, bridges and railroads helped create our economy for a century. If we have the infrastructure for technology and broadband and data and information, that’s going to create so many business opportunities that people haven’t even conceived of yet, because that infrastructure will be there and allow them to come up with new business concepts or new ways to serve their customers. So, it’s exciting to see that we’re investing in not just our traditional infrastructure, but also the smart infrastructure that would help us really gain a competitive advantage over other states.
Important Business Resource
Community Development Block Grant/Community Development Loan Fund: The CDBG/CDLF program awards funds to communities and businesses for real property, site improvements and infrastructure, and working capital. The CDBG/CDLF’s economic development function is designed to assist primary and retail sector businesses looking to establish or expand in North Dakota.
That’s pretty interesting. Gathering most of what you said there, as you’re talking about the advantages that the state of North Dakota has for us and I like that. I think about that a lot and I think a lot of business owners should. For instance, the only bank owned by a state in the country, right?
I think you have some other ag-specific advantages, but maybe if you can continue talking a little bit about other advantages you’re seeing for businesses, even with the bank, there’s just a lot right there.
Yeah. Two things you need to build a business is, you got to have capital and you got to have the talent.
You can get capital? I didn’t know that. (Laughs)
Or you can bootstrap. Smart guys bootstrap (Laughs) and get it done that way. But sometimes when you need growth, you need capital to grow. So, the Bank of North Dakota is an interesting thing. It was created 100 years ago by the citizens of the state, because they were concerned that the big banks in Minneapolis were taking advantage of all the new Americans at that time, the immigrants that were coming from Scandinavia and Germany that were populating our plains. They said, “We’ve got to have our own source of capital.” So, the bank has two missions. One is it’s a bank that acts as a repository for all the revenue that comes into the state. And so it acts effectively as the bank for the State of North Dakota, but it also has a mission.
And the mission portions of it are, I don’t want to call that non-profit versus for-profit, but they carve off capital from the bank through legislative action and say, “Hey, we want to invest in innovation, we want to invest in all kinds of different programs.” And again, this is where you contact the Department of Commerce to get a list of all the things that we do to work with you. Because if people have ideas, whether it’s ag product-related ideas or whether it’s growing a business, there’s a number of programs where the state will participate in and support and help people get the capital they need to grow their businesses.
Important Business Resource
Operation Intern: A grant program designed to expand the number of internships, work experience and apprenticeship positions in North Dakota. A $4,000 matching grant per student is available to employers within the state’s targeted industries (Energy, Advanced Manufacturing, Value-Added Agriculture, Tourism, and Technology-Based Business) and those looking to fill in-demand occupations.
I have really good feedback I want to share with you and you might not have an answer, but the number one biggest feedback I’ve received and I’ve been shocked by how many businesses I meet with that have direct sales. They have someone who’s in sales going out whether it’s across the country or the world or locally to sell something face to face or directly. And almost all of them have sales problems. They have all the support to start a business but once they start you’ve got to sell the stuff. And so there’s a struggle on sales training and sales certifications. Now that you have to pay salespeople a lot of money because of the job market, and I hear it constantly to the point where we’re starting to provide sales services because people just need sales help and it makes sense almost every business needs sales, right?
And so I don’t know if that’s ever a conversation on your level but I’m seeing it from the street level, it’s a real right-now concern. So, I just wanted to throw that out there and see if that’s ever been something that comes across your table or you think about.
Well, I’m smiling because I lived this when we’re trying to build Great Plains Software. One of the biggest risks we took was we decided to build out a national sales force and not pilot it. We didn’t plan to hire two or hire four or hire whatever. We had grand plans of, let’s go from zero to 60. Literally, we’re going to have zero salespeople, now we’re going to have 60 salespeople and we’re going to put them all over the country and things are going to be amazing. And it turned out amazing, but we almost went under because of the mistakes we made and I’ve lived through that whole thing. I would say to the small business owners that are out there today that it starts with understanding what the customer wants.
And people have said to me sometimes, “Hey, should I go get an MBA?” And I’m like, “I can save you two years and tens of thousands of dollars in tuition with one sentence. Be better than the competition at what’s important to your customers. If you can do that you’re going to have a successful business that’s better than the competition in what’s important to your customers.” Well, a lot of people fixate on their competitors, but they don’t understand what’s really important to their customer and I think again, getting salespeople that know how to listen, getting salespeople that know how to ask questions, getting salespeople that come back is important.
I would tell people when we had this thing and we were like, “Our salespeople aren’t selling.” And then everyone’s like, “Well, let’s get rid of all the salespeople.” I met with all the salespeople and I said, “I don’t care if you don’t make your quota next quarter, but if you don’t make your quota, you’ve got to come back and explain to us why people aren’t buying our product and they’re buying somebody else’s.” So, if you can’t bring a sale, you’ve got to bring insights. And they came back and said, “Here’s how you have to change your product, here’s how you’ve got to improve your service.” And then the sales force became like you. You’re out there listening to 500 people. That listening helped us turn the corner and save the company.
And then guess what, when we fix some of those other things, our sales guys started to be able to sell. At the end of the day, it’s always a team effort. But if you can’t bring insights or revenue, then they weren’t on our team. They could go work for somebody else.
Yeah, that’s really great insight and it has got me thinking too.
Important Business Resource
North Dakota Development Fund: Primary sector businesses can secure up to $1,000,000 in financial assistance for use in real estate, equipment, and working capital through the North Dakota Development Fund.
Where To Start A Business
Well, I know you’re a competitor because you like to win. And I’m a competitor. It’s easy to focus on the competition as opposed to focusing on the customer, and in state government that’s one of the things that we’re pushing on. If you go back in that interview four years ago, one of the things I said was Lieutenant Governor Brent Sanford and I were running to treat the citizens of North Dakota as customers. That’s one of the things we said. And then what’s the reality? I get to the state government and we found over 170 different websites. If you want to get a fishing license and a boat license and your driver’s license and check your taxes and if you’re in business and you want to get your business ID to create a new LLC or do your workforce insurance, you have to go to different websites. None of them are connected.
If you came back to any of those websites, even after having been in business in North Dakota for the last 20 years, every time you showed up, we’d be like, “Mike, who is this? Okay, we’ll re-enter all your information.” The average citizen has two consumer experiences. One is the Apple App Store and the other is Amazon Prime. And when you go to Amazon Prime and you’re buying a book one day and you’re ordering groceries another day and buying a part for your combine the third day, they don’t each time go, “Who are you? Re-enter your stuff.” It’s like, “Oh, welcome back. Here’s one click, buy.” And so we’ve tried to introduce this concept in the State of North Dakota, if we want to treat citizens as customers, then there’s a growing gap between the consumer experience and dealing with state government.
I’ll be speaking in a group of people and ask, “How many of you have got a supercomputer in your pocket? How many of you have got a smartphone?” Okay, they raise their hand. “How many of you have more than 50 apps on your phone? How many of you have an app from the State of North Dakota?” And then maybe two people raise their hand and they’re like, “I’ve got the Department of Transportation winter weather roadmap.” That’s the only one that ever comes up. We are so far behind as a state in terms of having an experience where a small businessperson shouldn’t have to spend a bunch of time trying to go to dozens of agencies just to do their business. So, we’re trying to create a one-stop, single hub. Today, we’re still sending people to too many different places.
This is the best thing that I can hear. That’s good to hear that you’re working on that right now. And that’s something you’re looking to roll out over the next couple years, right?
Important Business Resource
Innovate ND: Innovate ND provides entrepreneurs access to venture tools, resources and mentorship.
- access to a certified entrepreneurial center
- assistance on the Business Model Canvas
- business planning tools
- prototype development
- access to the statewide entrepreneurial ecosystem
- grant funds to assist entrepreneurs in commercializing their ideas
Absolutely, at the State of North Dakota, we have some very dedicated people that are working there in information technology and they’re working on what they’ve been asked to work on. We went through and interviewed them and then we said, “How many of you are working on running your existing system, which is usually a legacy system that might have been purchased in the 80s, 90s or 2000s? How many of you are trying to grow that system? And who’s working on transformational stuff like we were just talking about?” Well, we went through hundreds of IT employees, 91 percent of their time was going towards running legacy systems, 9 percent was growing those legacy systems and zero was being spent on transformation.
There wasn’t a single cloud mobile software developer working for the State of North Dakota. And everything I’ve talked about is how we have to go cloud mobile and we have to have security, we have to take care of all the cybersecurity. So, then I’m right back to where we started the conversation. I’m just like all of your readers, I’m an employer trying to hire people . And how do I hire people? I have to create culture and purpose and all the things to get them to want to come. When there are so many opportunities in the private sector, particularly in software, why would you come to work for a state government? And yet, what we have to do is deliver great software systems to provide the simplification for business owners like you. So, it’s a challenge, but we’re up to it and trying to solve it.
Personally, I think that’s a really great move for people like myself who just don’t know where to start sometimes. But now let’s discuss this real quick. Let’s say I’m a business owner that understands how to get my way around the resources and I’m familiar. What are some things we need to know to support your efforts and the state? What should we be focused on to show more support or get more involved?
Well, it’s a fantastic question. And I think the answer is pretty simple. And it really starts with our state legislature. Our state legislature is a citizen legislature. Most of those folks that are in the legislature have got another job: they’re teachers, they’re farmers, they’re architects, they have something going on that they’re doing outside in their real life. And then, every other year, they come together for 80 days in Bismarck. I’ve found that people know who their mayor is, they maybe know who some of the city commissioners are. But even in a market like Fargo-Moorhead and some of the other metro areas, people don’t know who their state legislators are. There are three state legislators, one senator and two representatives, for every 15,000 people. So, in a market like Fargo, there’s dozens and dozens of state legislators. So the very first thing I would say is, check out the address of your home and go, “What district do I live in and who represents where I live?” And then check your address where you work and say, “Who represents me where I work?” They could be two different districts, because some of these districts are only a few square miles in Fargo; you could have six legislators who would love to hear from you. You could say, “I work in your district, I’m a business owner in your district and these are my concerns.” Or if where you’re living you could call another three and say, “These are my concerns.” Legislators really listen to their constituents, but sometimes we don’t have enough engagement. And again, small business owners — they’re busy, they’re running their business. In the old days, it was like, “Oh, if you want to have input, you’ve to drive to Bismarck and be part of the hearing.” Well, who’s got time to do that?
I would just say grab them here when you’re home, grab them in the offseason, grab them when they’re not in session. They’ll come back into session next January, but talk to them now and then they can start working on fixing some major concerns and introducing new legislation. And then at some point probably, they might say they’re talking to their legislator and they might go, “Hey, I could do that job, I should run for the legislature.” Because we need more business owners and more small business owners that are engaged in the system to think about public service. And that’s the thing, because we have people in both parties that often run and they run unopposed for these positions. I think that these positions have a lot of power and a lot of influence and I think competition is good. And I think it’s good if we have people that can care about their communities, care about their companies, care about the state and getting engaged at that level. Get to know them and give us your feedback.
North Dakota Legislators In Districts Around Fargo
In order to find the whole list of North Dakota legislators, visit legis.nd.gov/assembly/66-2019/members/house
Sen. Tim Mathern, 701-476-7825
Rep. Gretchen Dobervich, 701-361-5627
Rep. Ron Guggisberg, 701-367-2478
Sen. Judy Lee, 701-282-6512
Rep. Kim Koppelman, 701-492-7317
Rep. Austin Schauer, 701-730-4474
Sen. David A. Clemens, [email protected]
Rep. Ben Koppelman, 701-491-0665
Rep. Andrew Marschall, [email protected]
Sen. Kathy Hogan, 701-235-1916
Rep. LaurieBeth Hager, 701-280-2535
Mary Schneider, 701-306-0860
Sen. Kristin Roers, 701-566-0340Rep.
Thomas Beadle, 701-235-2348
Rep. Ruth Buffalo, 701-491-8175
Sen. Merrill Piepkorn, 701-205-2665
Rep. Josh Boschee, 701-367-3513
Rep. Karla Rose Hanson, 701-793-9181
Sen. Ronald Sorvaag, 701-361-2156
Rep. Mary Johnson, 701-235-5912
Rep. Tom Kading, 701-639-4849
Sen. Jim P. Rogers, 701-371-4999
Rep. Jim Kasper, 701-232-6250
Rep. Shannon Roers Jones, 701-356-5050