Anne-Margaret Sobota

Thursday, 23 March 2006 19:00

Aiming high

David Lewis saw a better way to serve clients when he started The David Lewis Co. Inc.

The CEO hired the most experienced and talented people he could find, kept project turnover to a minimum and set ambitious growth goals.

He also makes sure the company, a consulting firm specializing in finance and accounting issues, doesn’t bite off more than it can chew.

“In our business model, we operate at about 90 percent utilization,” says Lewis. “That means that 10 percent of our consulting team typically is on the bench at any one time, ready to be deployed. And as strong as our desire to deploy those people is, if a client needs something and one of those people can’t do it, we don’t attempt to deploy them anyway. ... It’s a lot easier to grow if you don’t lose your customers.”

Lewis’ model vaulted his company to $24 million in revenue last fiscal year, a 70 percent increase over the previous year.

Smart Business spoke with Lewis about how he’s planning for the future and how he positions his company ahead of the competition.

How have you grown your company?

One of our basic tenets is we keep our consultants on projects until the original project scope is complete. We don’t roll them on and off to meet our own utilization objectives.

If there are 10 or 15 people sitting in a conference room and one or two of them change out, I can assure you, in many cases, the client won’t even know the difference. But that doesn’t mean that knowledge and experience aren’t walking out the door and there’s not a learning curve for the new person, because there is.

Keeping project turnover [to a minimum] is critical because the longer somebody works at a company on a project, the more they’re learning about the organization, their systems, the personalities, etc., and in a way, the more value they may bring.

How do you set goals for the future?

We’ve been very disciplined historically about setting three- to five-year goals, working them back to one-year goals and working those back to one-week goals. We’re good at managing against those and taking corrective action steps when we’re at variance with our objectives.

In most companies, when they’re smaller, there’s a very strong focus on the top line or on product develop, and sometimes there’s not a very strong emphasis on infrastructure development. So as companies grow, they reach a point where the size of the organization has outstripped the infrastructure needed to support it.

We’ve been very conscientious about investing ahead of needs. We’ve done two major systems implementations in the last year, not because our then-current systems couldn’t support our business today but because, based on where we want to be in three years, they wouldn’t have been adequate. We think it’s better to do a systems implementation before you need to than waiting until the company is about to implode, which is frankly what most companies do.

How do you condition your employees to react positively to change?

You can either lead change or have change imposed on you. In our company, when you set really ambitious growth goals, you condition your organization to change. So instead of changing in a reactive and chaos-inducing way ... if we’re going to double, triple the organization, everybody in the organization knows that it’s going to have to change radically almost on an ongoing basis — not change the business we’re in or our values or our goals, but just you have to transform the organization all the time.

If you set modest goals, you’re going to get modest growth. If you set really ambitious goals, No. 1, even if you short those objectives, you’re still going to end up outgrowing most companies. And No. 2, then you create a culture which is conditioned to expect and anticipate change.

The people in our company are a very uncomplacent group of individuals. We know that whatever we’re doing right now, it isn’t good enough. We know it’s going to have to change, and we know we’re going to have to tune it to accommodate growth.

How do you position yourself as a great place to work versus your competitors?

[At most firms], you have two-, three- and four-year people, the staff and seniors who do most of the work. And the distribution of economic benefit is actually skewed in the opposite direction of who’s actually doing the work.

Staff are doing most of it, working a lot and getting paid the least. We think that’s of questionable economic value.

In our model, 60 cents of every revenue dollar goes directly to the field and the people who are executing the work. So our bill-to-wage ratios are very different and much lower than what you’d find in a very large consulting firm. The work is being done by very experienced people, and so our clients can get more done with less because the billing rates for comparably experienced people in very large consulting firms would probably be double.

HOW TO REACH: The David Lewis Co. Inc.,

Tuesday, 28 February 2006 10:34

Remedy for success

As health care costs continue to rise at an alarming rate, many employers are looking for ways to curb costs.

At Moen Inc., management realized the company already had a valuable asset that could contribute to reducing health care expenses and creating a healthier work environment.

Moen, a manufacturers of faucets and other plumbing accessories, had installed a fitness center about 10 years ago when its headquarters was renovated. And although it got used, the company realized a few years ago that it needed to maximize the center’s potential, says Chad Hanzlicek, manager of the Moen Wellness Program.

“(Ten years ago), it was really a forward-thinking idea to have a fitness center on site,” says Hanzlicek. “It was more of just a soft benefit when they opened up the doors — they’re big into retention of employees. The last two years, we’ve really taken a look at reducing absenteeism, increasing presenteeism and taking a look at how many [health care and sick leave] dollars we’re spending for [fitness center] members versus nonmembers.

About $4 to $5 of health care costs were spent on members versus $45 to $47 for nonmembers. That’s a substantial difference between the two — an eye-opening difference.”

So Moen began shifting the focus away from the center as a retention tool to it being a tool for productivity and health care savings.

The company contracts out to L&T Health and Fitness, and Hanzlicek, to run the center and its fitness programs. Hanzlicek is charged with building membership and creating fitness programs and contests to motivate Moen employees to get active.

“Membership is around 285 right now, which is about 56 percent of the 500 employees at this Moen site,” says Hanzlicek. “This is the highest it has ever been.”

To encourage Moen employees to take part, the center offers programs with prizes and incentives for participation. Some are team-based to encourage peer motivation, while others are directed at those who just don’t have 30 minutes to 60 minutes a day to exercise. Another program is aimed at those who don’t like to exercise at all.

“There’s a reason why we don’t have everybody in the building, because (some people) are adverse to activity or other factors,” he says. “So we’re trying to give them a way to increase their health.”

The Moen Wellness Program recently implemented a “Quick Fit” program that encourages people to do just 15 minutes of physical activity a day.

“You do three minutes of strength training, two minutes of stretching and 10 minutes of cardio, which could be just walking on a treadmill,” says Hanzlicek. “They can do it at home. They don’t need to come to the wellness center to do it. And they’re still going to see benefits because the research shows time and time again that just with small strides, you can make big differences, and that’s what we’re trying to tell everybody.

“They don’t need to get 60 minutes a day. That’s outrageous for most people. In as little as 15 minutes a day, they can still see decreased blood pressure, decreased heart rate, decreased body fat percentages and things of that nature.”

HOW TO REACH: Moen Inc.,

Monday, 30 January 2006 11:17

Chipping away at turnover

In 2004, Shearer’s Foods Inc. was facing huge increases in employee turnover. Retention and recruitment issues threatened the stability of the Brewster-based potato chip company as it headed into its peak season and was preparing for a significant expansion.

Chief Operating Officer Scott Smith knew something had to be done, not only to find better job candidates but to also find ways to make people want to stay with Shearer’s once they were hired.

After bringing in a new director of human resources, the company embarked on creating a Retention Task Force. Smith and his fellow executives solicited volunteers from all departments and levels of the company to join the task force to find a solution to the turnover issues.

The task force came up with a number of programs and initiatives, including in-house job fairs, a new associate orientation and training program, and better methods of submitting feedback to the company.

Smith says the orientation and training programs has had the most successful impact on the company.

“Any new job is going to be challenging for folks,” he says. “If you don’t get people acclimated and brought up to speed, you’re probably going to lose them in that first 30 to 90 days.”

The training program gives new hires the opportunity to familiarize themselves with the company and its culture. They spend a day meeting executives, touring the plant, listening to presentations on the history of the company, and learning about safety issues and performance expectations.

They also have the chance to participate in team-building exercises and get basic training on the equipment and products they’ll be working with.

Since implementing the retention and recruitment initiatives, turnover has declined by 65 percent, allowing Shearer’s to save $1,800 in training, recruiting and orientation costs per job opening.

Smith says morale has also risen among employees because of fewer overtime hours worked and more flexible work schedules. And existing employees also say that the quality of the new hires has greatly improved — they are more integrated and more willing to work.

Shearer’s fiscal year 2005 brought a 26 percent increase in sales, which was translated to even higher profits for the company with the savings in recruitment and retention costs.

HOW TO REACH: Shearer’s Foods Inc.,

Monday, 30 January 2006 09:55

A prescription for change

It’s no secret that health care costs have risen tremendously in the last decade, leaving employers with higher premiums and their employees with higher out-of-pocket expenses.

The increases have left many employers wondering how to continue to provide health benefits to their employees while controlling costs.

“Most employers have a drawer of issues they’re dealing with, and health care for their associates is extremely important,” says Joseph LaGuardia, regional vice president of sales for Anthem Blue Cross and Blue Shield. “They want their employees to have the best cost for health care that they can afford and the system can deliver.”

A recent report by Anthem entitled “Health Care Costs: Challenges and Solutions” shows that the Medical Consumer Price Index has risen at a rate double or triple that of the Total Consumer Price Index.

But to understand how to combat these rising costs, employers must first understand the causes.

In today’s society, we have become accustomed to consuming whatever it is we need without thinking about the causes and effects of that product or service, and health care is no exception. As a culture, we don’t really evaluate the necessity of the medical care or medications we receive and the effect they have on overall costs.

According to Anthem’s report, from 1992 to 2002, the number of issued prescriptions increased 74 percent compared to a population growth of only 12 percent. The report also said that approximately one-third of the 150 million outpatient prescriptions for antibiotics each year are unnecessary, as are many emergency room visits and tests.

Then there are the innovations in technology and pharmaceuticals, as well as the investments in newer medical facilities, which are great for health care but not for health care costs.

But one of the most overlooked factors in rising health care costs is the human component, says Perry Braun, vice president of sales for Medical Mutual.

“There’s a general theory that as we age as a population, the more health care expense we’re going to incur,” says Braun. “The more that the baby boomers and other pockets of the population age up, more intense need for health care resources are going to be demanded. If we simply eat better, exercise more, pull ourselves away from the television set, we can also impact how much health care (spending) is going on.”

And therein lies the key, he says. Health care companies and employers must find ways to help employees consume fewer health care resources. The solution is to give people the tools to become more aware of their physical condition and embrace healthier habits.

Plan of attack
It’s not enough to just focus on those with chronic diseases, says Braun. Employers now must also focus on the healthy and invest a similar amount of time and energy to maintain their health.

“What I think employers are starting to recognize is, ‘I can’t just invest in people who are sick. I can try to manage that, but what I can do is I can bring a little bit more proactive resources to the people who are healthy to help them understand where they are in their health status today,’” says Braun.

These investments may come in the form of disease management programs and health fairs or other healthy workplace initiatives.

“There’s fitness programs, there’s nutritional programs, there are education programs on reducing chronic conditions like heart disease, diabetes and pulmonary disease,” says Patricia Kennedy-Scott, regional president of Kaiser Permanente of Ohio. “There has to be an environment within the company that encourages (healthy habits). There has to be an environment where people have time to go out and walk during their breaks or lunchtime. Or create a pathway within the office where people can walk. Maybe we’ll have some of our meetings scheduled at 7 o’clock on the treadmill.

“In addition to that, people don’t wake up every morning and say, ‘Gosh, I wonder if I’m having problems with my blood pressure or my cholesterol,’” she says. “Most people don’t undertake having that type of screening unless it’s made available to them and made available to them easy. Employers who bring that type of screening into the workplace on an ongoing basis have a greater likelihood of helping employees who have these diseases.”

Several health care providers also are reaching out to employers to help their workers quit smoking. Medical Mutual has partnered with the Tobacco Use Foundation to provide Nicoderm patches free to its members. It also brings cessation stations on-site to provide information and sign employees up for counseling.

“Your issues may be smoking; a manufacturing company or a service company directly next door to you, their issues might be obesity, and the one next to them might be something completely different,” says Braun. “So it’s important for [us as insurance companies] to be flexible enough to bring the right kinds of resources matched to the need to not only address, again, those things that are driving the costs today, but to manage the rest of the individuals so that they do not become expenses in the future.”

Incentives for change
It’s one thing to provide these resources to your employees; it’s another to get employees to take advantage of them. The most effective strategy, says Braun, seems to be the creation of incentives.

For example, an employer might provide a reduction in contribution to health insurance coverage for individuals who have demonstrated a healthy lifestyle. The amount taken out of their paychecks for health care could vary depending on how many programs they participate in. One option is a sliding scale in which the more healthy the lifestyle they demonstrate, the less money that is taken out of their paychecks.

The incentive may be just the extra push some individuals need to start participating and taking an interest in their own health.

“You could bring Weight Watchers into your worksite, and upon successful completion of the 12, 10, 14-week program — whichever is appropriate — that part of that expense is refunded back to the individual,” says Braun. “But there are other approaches that make equally good sense. You can construct incentive systems around the frequent use of (fitness facilities in general).”

The key is to think outside the box — find initiatives and corresponding incentives that are relative to your employees.

What’s next?
While no one knows for certain what the health care landscape will look like five years or even six months from now, most health care professionals agree that we’re moving toward a more consumer-driven system.

“I think that what we’re going to see more of is a shift by employers away from first-dollar coverage to coverages where there are higher contribution requirements on the part of the employee in the form of co-pays and deductibles and perhaps even co-insurance,” says Kennedy-Scott. “You’ll see employers moving more and more away from providing coverage around chronic diseases and moving to plans that are focused on wellness and healthy lifestyles and emergency or catastrophic type of coverages.

“It’s going to be a requirement that consumers become more astute in their purchasing decisions because as employers back away from providing first-dollar coverage, that’s going to leave a gap. Employees are going to have to get really smart about how they fill that gap,” she says.

This will require health care providers to put information and resources into the hands of consumers to help them make better health care decisions.

“(Employees) should be able to go online as a member and identify at a hospital or a physician what costs what,” says Braun. “So why does an appendectomy cost three times more at one facility than another? Why does an office visit cost 20 percent more from one doctor versus the other when they’re right across the street from each other?

“Should consumers have the information? I think we’d all agree it’s helpful if they have it. [Asking ourselves], ‘What do they do with it now that they have it?’ is how we help consumers within a consumer-directed plan.”

HOW TO REACH: Anthem Blue Cross and Blue Shield,; Medical Mutual,; Kaiser Permanente,

Monday, 30 January 2006 09:42

The answer lies within

Jim Hill realized that the key to Benesch Friedlander Coplan & Aronoff LLP’s growth wasn’t necessarily acquiring more clients, it was finding a way to do more for the clients he and the firm already had.

“As clients get larger ... they have all sorts of different arms, which you as the corporate finance lawyer might not be thinking about,” says Hill, managing partner of the 140-attorney firm. “Start trying to create relationships with some of the other individuals within that client who are in different areas of the business.”

For example, a client for whom you handle tax planning may also need help with employment law or intellectual property law.

“If I’m a corporate finance attorney, my likelihood of going out to lunch with the woman who’s head of HR may be fairly remote,” says Hill. “However, if I start thinking about and talking to the principals about, ‘OK, well, who does your employment law work?’ or, ‘You should know more about our employment law work’ ... they begin to not have 14 different law firms but maybe three or four, and maybe ultimately one or two.”

This kind of business development approach is a win-win for both the service provider and the client, says Hill.

“Nobody of those 14 [other firms], with rare exception, has a real understanding of your total business,” says Hill, a fact that he points out to clients looking to consolidate service providers. “And there’s no real consistency between what one firm does and what another firm does.”

Hill says this targeted approach can be applied to any professional service firm, especially those whose employees have individual goals and who aren’t working as effectively as they could be as a team. It’s a matter of getting employees to change the tunnel-like vision they often work with and stop concentrating on how just their specialty can help their company.

“There’s statistics that really show dramatically how much more effective account management is with a team versus people hoarding (clients),” says Hill. “The profitability of firms that actually do this kind of team account management are so significantly higher than firms that still have four or five rainmakers who hoard the clients and say, ‘These are my clients, and you can work on them, but don’t ever think about getting too close to them.’”

It’s also a great tool for customer retention, because clients aren’t looking at one lawyer or one sales representative as the sole person in the company they should be dealing with.

“Over time, you develop a stronger bond, they know more of your people,” says Hill. “So if Jim Hill got hit by a bus or Jim Hill left to go to another law firm, there still are other relationships within the firm that may very well keep that client at the firm versus just packing up his business and going somewhere else.”

This business approach also has allowed employees at Benesch to gain confidence in their ability to create business relationships for the firm.

“It’s more comfortable because you may be initiating a relationship with the head of HR, but you already know there’s a lot of people (at your company) who know people within that organization,” says Hill. “So, you’re not just calling somebody up out of the blue who doesn’t know you or your firm from Adam and saying, ‘Why don’t you come out to lunch with me and I’ll tell you all about our employment law practices.’”

HOW TO REACH: Benesch Friedlander Coplan & Aronoff LLP,

Tuesday, 27 December 2005 09:59

Wordly approach

After establishing a strong U.S. market presence, Ultra Electronics Audiopack was looking for new ways to expand its customer base.

It found the answer in international markets.

“Our focus is design and production of communication products for harsh environments,” says Jon Adams, president of Garfield-Heights based Ultra Electronics Audiopack. “Our goal from the outset was to be the world leader in that niche. We started with that goal, and we always wanted to look internationally.”

Adams began searching for potential customers in overseas markets, targeting customer bases similar to those it markets to in the United States, including firefighters, HAZMAT crews and other first responders.

“We began to understand the key players in our market worldwide by attending trade shows, by reading periodicals, by talking with distributors in our field,” he says. “We looked at the competitive landscape worldwide. You want to verify that the product you have is of interest to someone. You want to identify potential customers and visit those customers to validate the interest in your product, and it starts to build relationships. If you have a customer that is really interested in what you have, they will often help you out through the build-up phase.

“We identified potential customers in Europe and then in Asia, and then began to reach out to those potential customers to show them products we had designed and understand their needs.”

That outreach enables companies to identify what elements of their products will be successful and what elements might need modifications or improvements to make the product more marketable or conform to international regulations, he says.

“The certifications in both Asia and Europe differ slightly from the U.S.,” says Adams. “We had to learn how to design products to meet international product certifications for the markets we serve.”

Because of the nature of the company’s products, Ultra Electronics Audiopack had to take a hands-on marketing strategy and work closely with sales agents and distributors as well as directly with customers.

“We’re not really selling a consumer product,” says Adams, “so it’s much more directive to us to make sales calls, demonstrate products and work more directly with products internationally.”

Adams says company leaders also should look at ways to work with competitors who already have a strong stake in the market they want to enter, especially if their products complement each other. For example, Ultra Electronics Audiopack has had success selling in Japan through Kawasaki, the largest supplier of self-contained breathing apparatuses to the fire service in Asia. Ultra Electronics Audiopack makes a heads-up display that integrates with Kawasaki’s apparatus and tells firefighters how much air is left in their tanks.

“This was a technology that we had already developed,” Adams says. “So we took that technology to potential users worldwide. I think to the extent we can cooperate, then there’s mutual benefit working with competitors.”

The company has also had success in Italy, France, Singapore and Norway.

“I think there’s more resistance to sourcing products from that kind of distance than I had originally thought,” he says. “A big part of what we have had to do is find ways to minimize the perceived risk. Part of it is building the relationship, which happens over time. Part of it is having a good reputation and an innovative product that they can’t get elsewhere.”

HOW TO REACH: Ultra Electronics Audiopack, or (216) 332-7040

Tuesday, 29 November 2005 06:39

On the right track

As president of the Northern Ohio group of MH Equipment, Fred Metzger saw the value in looking for ways to build on the company’s mission of customer service.

The company is one of the fastest-growing material handling distributors in the country, and in the past three years, has become the third-largest dealer of Hyster brand forklift trucks and products.

The people at MH Equipment are well aware that their success comes not only from their ability to sell products, but more important, from their ability to service them after the sale. To facilitate that, Metzger embarked on a mission to find a program or technology that would create more efficiency, and thus better customer service, in his fleet of 275 service trucks serving customers in seven states.

“I think we entered this with the prospect of being more efficient,” Metzger says. “We are always discussing ways that we can become more efficient for our customers.”

Metzger and his team began researching the Internet and trade magazines looking for a way to create better efficiency but found their answer in Beachwood-based SageQuest, less than half an hour away from their Twinsburg complex.

SageQuest specializes in Global Positioning System-based vehicle tracking, routing and reporting.

“A little black box gets mounted on our vehicle, and then the black box — and thus the vehicle — is tracked via satellite,” Metzger says. “We have a computer-monitoring program that monitors the vehicle. We can tell at any point in time where one of our vehicles is, where they are, how fast they’re going.

“This is a pilot project that we rolled out in Cleveland and Columbus. But we know that we’ve gained efficiencies in our dispatch, both in our routing efficiencies and the number of vehicles a person can handle for routing.”

Since MH Equipment’s dispatchers can see in real-time where every vehicle in their fleet is located, they can route the nearest vehicle to a service call instead of calling around to track down a vehicle. Metzger says customer response times have decreased tremendously — not only are dispatchers able to find the closest vehicle to a service call, they can also find the shortest route to get drivers there and provide them with directions.

The system also documents arrival and departure times and which services were rendered. Better time estimates allow the company to increase the number of clients scheduled per day.

Metzger considers the investment in SageQuest’s technology an example of spending money to make money. It also has saved the company on fuel usage and mileage.

“I think it’s a significant investment, but we believe the investment is paying off and look forward to it continuing to pay off,” Metzger says. “You have a handle on your service vehicle at any time.”

The database also allows Metzger to keep track of scheduled and preventive maintenance on the vehicles, and the system prevents unauthorized use of company vehicles, speeding and excessive overtime.

MH Equipment has been so happy with the results that it is considering expanding the technology to the rest of its mobile work force.

HOW TO REACH: MH Equipment, (330) 425-2476 or; SageQuest, (888) 837-7243, ext. 243 or

Monday, 28 November 2005 12:16

Different kind of medicine

Through its involvement in the Locks of Love program, Jenniffer & Co. salon has collected the equivalent of almost 2 miles of hair to make hairpieces for children with a medical loss of hair, often due to cancer.

For owner and operator Jennifer Pealer, contributing her business’s talents and efforts is better than any dollar amount she could donate. And by getting other people involved, she believes she is creating a community of caregivers.

“With the Locks of Love, you can get people at such a young age interested in giving,” says Pealer, who co-owns her business with her brother, Joe Sullens. “It was a way that I could use my profession as a tool to make a difference.”

People may donate hair year-round at either of the salon’s two locations in Mentor. They receive a free cut, style and finish with 12 inches or more of donated hair.

Giving is so important to Pealer that her 60-plus employees cannot advance on the salon’s career path structure without volunteering for community fund-raisers such as Relay for Life and the American Cancer Society Walk-A-Thon.

Pealer also runs the Lake County branch of the American Cancer Society’s Look Good Feel Better program, which provides cosmetology advice and guidance to women who are undergoing cancer treatment. They receive help with wigs, make-up and advice on how to look good while experiencing effects of treatment.

The salons have also designated a private wig room for cancer patients and others who have lost their hair due to illness. Individuals may meet confidentially with a wig specialist, who will make recommendations for wigs and show them how to maintain them.

Pealer also coordinated a fashion show to raise money for the Riverside High School Fieldhouse. She assembled more than 70 community vendors to set up booths at the event and 10 caterers to provide refreshments. The event raised $5,000.

HOW TO REACH: Jenniffer & Co., (440) 266-4247

Monday, 28 November 2005 12:07

Second time around

PPG Industries Inc. is no stranger to giving. In fact, as an honoree last year, the Barberton plant is no stranger to the Pillar Award for Community Service.

But there’s been no slacking among PPG’s employees in the past year, says plant manager Richard Bauer. Instead, workers were motivated to do more.

When they’re not manufacturing the optical materials, designed silicas or fine chemicals found in products such as corrective lenses, automotive tires and store loyalty cards, many employees can be found volunteering as tutors and mentors at Highland Middle School or supporting dozens of other community projects and organizations.

Bauer says supporting education is particularly important to him and his team at PPG, a claim made credible by the two $6,000 scholarships PPG awarded to Barberton-area seniors last spring and the thousands of dollars it has donated to Highland’s reading, physical education and after-school sports programs.

The plant also takes an interest in promoting science and technology among area students. By sponsoring the University of Akron’s Women in Engineering summer camp for seventh- and eighth-grade girls, PPG hopes to encourage careers in science and engineering and dispel myths that these are male-dominated fields, says Bauer.

PPG’s generosity also extends into the surrounding communities. In April, the company entered into a long-term lease agreement with Metro Parks Serving Summit County to construct a bike and hike trail on four miles of PPG land that it provided to Metro Parks at no cost.

Corporate contributions also were made to United Way of Summit County, NEOUCOM Foundation, Ronald McDonald House of Akron and local public libraries, to name a few.

PPG and its employees even look to aid the environment. This summer marked the 20th anniversary of the Lime Lake Reclamation Project, a voluntary initiative to reclaim land once used to support former manufacturing operations at the facility. PPG’s goal has been to create green space where there was formerly a barren waste site. The program is entirely funded by PPG and has the support of the Ohio EPA and the local community. HOW TO REACH: PPG Industries Inc., (330) 825-0831, or

Wednesday, 25 October 2006 20:00

Grinding out results

 Like her grandmother before her, Georgia Dutro is fearless in the face of a challenge.

Following World War II, Dutro’s grandmother, Dollie Dutro, gave up her job as a stunt pilot and wing walker to start a tool sharpening company. D&D Saw Works thrived following the war, but by 1989, when Georgia Dutro took over the company, it was struggling.

She wasted no time implementing a strategy to turn around what is now D&D Tool & Supply.

“We expanded our markets, we expanded what we offered, and we also began a systematic buying or merging with key competitors,” says Dutro, whose San Diego-based company serves customers from Los Angeles south into Mexico.

Under Dutro’s leadership, revenue has grown from $2.5 million in 1989 to $38.4 million in 2005, and she expects it to surpass $40 million this year.

Smart Business spoke with Dutro about how she creates a company that is responsive to customer problems and that empowers employees.

How do you differentiate yourself from the competition?
We help the customer solve problems. We don’t just hand them a catalog and say, ‘What do you need?’

We’re looking to see what else we can offer them, and offer them more. We want to say, ‘Where are you experiencing bottlenecks? Where do you have problems? Where have you had safety issues? Where have people been hurt? Let’s look at those bottlenecks in your production or those safety issues or places you might have liability, and let’s help you become more profitable.’

The No. 1 part of our mission statement is, let’s increase our customers’ profitability. That doesn’t mean we’re going to try to sell you this drill bit 5 cents cheaper; we’re going to try to show you how to drill more holes — faster, cleaner, safer.

How else do you build customer loyalty?
You’ve got to be able to help the customer out of a bind, which is more than just saying, ‘Yeah, I can sell you a drill bit.’

Things happen in manufacturing. Machines go down. They have a rush on things. You’ve got to go that extra mile. I don’t care if it’s running over to Arizona and picking up stuff from another distributor, basically losing your shirt on that order, but you help the customer.

It’s that willingness to do whatever it takes to help them. We’ve built long-term, loyal customers out of that.

How do you motivate and empower employees?
Our goal is to allow an employee an opportunity to have a career, not just a job. They can look around and they can say, ‘Well, right now, I’m a receptionist. Where can I go from here?’

We have a goal-setting session with each employee. We don’t call it a review. We’re sitting down and we’re talking about goals — your personal goals, our company goals, how can we get those in alignment? Where do you want to go from here?

We try to show where we are going, not just where we are today, and where there’s going to be opportunities. We also try to convince employees that maybe don’t have self-confidence, but we see that they have the ability, and say, ‘Come after this job’ and ‘Here’s what it takes.’ We actually call that, ‘Come take my job, please.’

Then we have what we call the ‘no harm, no foul’ period, meaning you can take [a different] job. You can come try it. If you don’t like it, you can always go back to your other job — no harm, no foul.

We’re trying to empower people to help themselves to the knowledge that’s here. We’ll help them. We’ll give them the classes and the knowledge. And if they’ve got the skills and the ability and the drive, there’s no stopping them in this company.

How do you merge employees from acquired companies into your culture?
You’ve got people that have worked profitably for many years, either for the people that you’re merging with or maybe they were the owner. Getting them to enjoy doing what they do well and giving up what they don’t enjoy has been our key. We sit down with a prospective merger partner and we say, ‘We want you to design your ideal job.’

Generally what you find out is these entrepreneurial people are really into sales, they love customer service, they really know the product, and what they want to give up is accounts receivable, accounts payable, payroll, wages, HR. And we say, ‘Great. Perfect match. We’ll put you out doing what you do best, and we’ll take over all the stuff that you don’t like and that has been a real headache for you.’

If you can help them design their ideal job with their personal goals in mind and see how that aligns with the company, you’re going to have a great team.

HOW TO REACH: D&D Tool & Supply,