Kathy Simmons

Tuesday, 29 November 2005 04:49

Banking on success

In today’s environment of mega bank mergers, you might expect Dorothy Martin to be concerned.

After all, as president of Optimum Print Solutions (a commercial print manufacturing company) and treasurer and secretary of Optimum System Products (a supply and outsourcing company for the banking industry), she relies on community banks for her business.

But Martin has no worries.

“Community banks are here to stay, especially considering the baby-boomer generation,” Martin says. “People would rather deal with a friendly teller instead of an impersonal Internet service. For every megamerger, approximately 25 community banks pop up. Business is good.”

Optimum System Products was founded in 1985 when Martin, an accountant, and her husband, John, a District Sales Manager, decided to spread their entrepreneurial wings.

“The timing was right to take the plunge,” she says. “Three years later, operating out of our basement with six employees, it was getting a little crowded. Semi-trucks were delivering supplies to our home. The neighbors started complaining, and we knew we had officially outgrown the home business.”

Today, Optimum employs 60 people and generates $12 million in sales per year by providing service to a national client base of 1,500 community banks and Central Ohio companies.

“As a one-stop shop, we act as an aggregate buyer for our clients’ supplies and printing needs,” Martin says. “We provide virtually every item a bank requires to operate, including printed products, office supplies, forms — even customer giveaways like lollipops and dog biscuits. This allows them to compete effectively with the larger banks.”

Smart Business spoke with Martin about how she generates new customers and how she hires the best employees to give her business a competitive advantage in a digital world.

How do you generate new customers?
The banking industry is very conservative. Personal recommendations carry more weight than slick advertising. We rely on referrals from other people that work with banks. These third-party alliances are crucial.

We also host ‘lunch and learns’ and focus groups that add value and generate network opportunities. Finally, we have outstanding sales representatives who are involved and well-connected in the communities they service.

What is Optimum’s greatest challenge?
Technology has been a boon for some industries, but the print market is not one of them. Paper has been replaced by electronic sources, which has led to overcapacity, higher paper prices and reduced margins.

We’re facing a digital future, and companies that are solely ‘ink on paper’ may not survive. We’ve tackled this challenge by diversifying our products and making sure we are more than a printing operation.

We offer design, direct mail campaigns, fulfillment, distribution and online ordering to streamline the process.

How do you keep expenses down?
Employee training is the best investment. We have a robust, online, module-based learning program. A local college professor conducts on-site leadership classes twice a month.

Another expense reduction secret involves developing partnerships with other companies when expanding to new territories. It’s usually cost-prohibitive to start from scratch in a new location.

For the past 12 years, we’ve partnered with Scranton, Pa., distributorship Forms Plus Inc. Our companies formed a joint venture called Optimum Systems Plus. We work together by sharing sales representatives and warehouse/distribution facilities. It’s the ultimate win-win.

How do you hire the best employees?
We’ve assembled an A-Team, but not without some lessons along the way. Even with the most glowing recommendations, some people simply do not share our value system.

With so many employment rules and regulations, it’s not easy to disconnect when things aren’t working out. Our basic HR policy is to hire great people, develop and take care of them, and maintain a culture where people actually care about each other.

We treat our staff well. Every employee has specific goals for the year and the opportunity to join the Achievement Club if they meet or surpass 80 percent of them in any year. The rewards include a great trip — last year, 27 associates and their family members enjoyed a week in Hawaii.

Everyone we hire and work with, including customers and vendors, must have a passion for integrity. If our business does not operate with the highest standards, it reflects negatively on the banks we serve.

Friday, 30 September 2005 09:53

Cashing out

Selling your business and transitioning into retirement involve balancing many different considerations. Careful planning and decision-making are essential. The following are seven key issues that should be explored by a business owner contemplating a business transition/retirement.

Business value. Do the due diligence required to determine the value of your business. Your decision whether or not to sell may depend on the potential selling price. Although valuing a closely-held business is not an exact science, obtaining a formal (or even an informal) valuation of your company provides a benchmark value that you can use in negotiating a sales price and an approximate amount that you can expect to receive.

Financial planning. Know how much money you will need for retirement. Many successful business people retire without a plan for financing their retirement or managing their assets. Many retire too early and end up with much less in their retirement fund than expected. Deal with this issue by obtaining a business valuation and consulting a financial planner.

Security. Make sure as much of the sales proceeds as possible are secured. The sales price may be more than you dreamed of, but if you end up actually receiving only a fraction of it, your comfortable retirement will be in jeopardy. To the extent possible, the sales price should be paid in cash or secured by assets of the buyer and/or personal guarantees of individuals who have assets.

Be emotionally prepared. Turning their baby over to someone else is the most difficult and painful part of the transition for many business owners. They can’t deal with the thought of their company being broken up, or of loyal, long-term employees being laid off. In many cases, staying on as a consultant while new owners change the company is not a good situation. However, staying on to transition the company to the new owners is the best way to ensure that the company remains profitable.

Retirement planning. Have a plan for how your time will be spent in retirement. Hobbies can fill only so much of a retiree’s newfound free time. If you’re not certain this is the right time to get out of the business and retire, sample retirement by taking an extended vacation or even a leave of absence. The decision to cash out shouldn’t be made under stress or in the heat of battle. It’s better made after being away from the business for a period of time. If you can’t wait to get back to the office after two weeks of vacation, this may not be the right time to sell the business and retire.

Family matters. Don’t forget to consider the possibility of transitioning your business to a family member. For many business owners, the most difficult decision in cashing out is who to sell to. Determine whether children or other family members have a serious interest in taking over the business and if they can finance the purchase. The owner has to make the hard decision as to whether family members are capable of running the business successfully. Good communication is essential at this stage.

Expert help. The process of cashing out is a series of important decisions involving financial planning, estate planning, business valuation, family relations and many other considerations. Qualified experts not only help in planning and decision-making, but also in finding and qualifying potential buyers. Whether you decide to cash out or opt to continue your business, make your decision on the basis of a sound assessment and a well-thought-out plan.

Brian Simmons is a member of Doeren Mayhew’s Corporate Finance and Strategic Services Group. He is both a Certified Public Accountant and a licensed attorney. Doeren Mayhew, located in Troy, Michigan, is a regional accounting and consulting firm that provides a wide range of professional services to middle-market companies. Contact Simmons at (248) 244-3118 or simmons@doeren.com.

Friday, 29 July 2005 10:56

Solid as a rock

Heart surgeon Russell M. Nelson once observed, “A firm foundation is necessary for any building, institution or individual to endure.”

Laura Deklewa, president of Allegheny Construction Group Inc. in Bridgeville, is a walking example of these wise words.

Deklewa’s foundation includes 28 years in the construction industry, a strong business and life partner (Richard Deklewa, her husband since 1979, who serves as Allegheny’s vice president and construction executive) and an exemplary staff. And don’t forget Deklewa’s personal investment.

“When it comes to secrets of success, there is one ingredient that is not a secret — hard work,” says Deklewa. “I don’t know of any replacement for it”

Deklewa, who holds a bachelor of science degree in economics and business management, worked for her husband’s family’s construction business for 20 years before purchasing controlling interest in Allegheny Construction Group in 1998.

Deklewa was acknowledged as a force to be reckoned that year when Allegheny was named one of the top 100 growth companies in Pittsburgh. Its main focus at that time was pre-engineered metal buildings, but under Deklewa’s direction, the business quickly expanded to include institutional and industrial projects, with emphasis on work including demolition, concrete, steel erection, rough and finish carpentry, and interior construction. Staff count blossomed from two full-time employees to 82.

Smart Business spoke with Deklewa about her management philosophy and the advantages of working in a traditionally male business.

What is Allegheny Construction’s competitive advantage?

The building business is all about meeting deadlines. Anticipating and maneuvering around obstacles is imperative, and we do this very well at Allegheny. Our philosophy is to refrain from using subcontractors, as we prefer the work to carry our personal seal of excellence.

Custom millwork is one unique aspect of our business. We recently secured a large project with the University of Pittsburgh based on our ability to deliver state-of-the-art millwork. Our customer recognized that we had something they could not get elsewhere.

What’s it like to be a woman working in a traditionally male field?

It’s an advantage. Let’s face it, women are wired differently. I capitalize on this in my day-to-day work.

Women tend to clearly see the human element. This allows us to get inside the customer’s mind and determine what really matters.

About 80 percent of our business is generated by private businesses. We tend to shy away from public contracts, since added value is less of an issue with these jobs. It’s mainly about the bottom-line cost with public business.

We prefer to build relationships and delight the customer rather than secure a job by being the low bidder.

What is your management philosophy?

More than anything, I want to be considered fair, available and a good listener. You cannot be aware of what is going on in your business unless you are willing to pay attention, stay in touch with staff and be aware of what is happening at all levels.

I’m a hands-on manager and some people may perceive this as micromanaging, so I’m careful to balance my need to be in the know with employees’ need for autonomy and space.

What has been your most valuable business lesson?

The old saying is true — the devil is truly in the details. When I worked on a large power plant contract with Fluor Constructors, I learned first-hand how the biggest and best performed. I realized that you have no grace to allow anything to fall through the cracks.

What’s your people approach?

You cannot fit people into a mold. Creative management finds ways to minimize personal weaknesses while magnifying and capitalizing on the unique strengths and motivators. I look for values, ethics and good character.

What’s in the future for Allegheny?

Pittsburgh is an extremely competitive market. The reality is that there are more construction companies than there is work, which means we constantly have to stay on our toes, maintain relationships and identify opportunities where we can build loyalty and strong referrals from our clients.

I generally put in at least 60 hours a week, which leaves little time to stop and smell the roses. My strategy includes cultivating key employees and providing them with a higher level of responsibility and decision-making authority.

HOW TO REACH: Allegheny Construction, (412) 221-0500

Tuesday, 24 May 2005 07:12

Master of balance

Whether it's balance sheets or career/home balance, Julie Kunkel makes it look easy. As managing partner of Ernst & Young LLP's Columbus office and a partner in the firm's assurance and advisory business services practice, Kunkel wears several hats.

As managing partner, a position to which Kunkel was promoted in 2003, she coordinates the activities of nearly 200 people in Columbus across each of the firm's service lines. As the Americas director for retail and wholesale, Kunkel quarterbacks knowledge management and training for the accounting giant's staff members who serve clients in the retail and wholesale service sectors.

How do you keep your staff loyal and happy?

Ernst & Young has a set of values that we're really serious about. We keep them alive by constantly incorporating them into our discussions and daily work. The strategy is simple but powerful - people, quality and growth. And it's not an accident that people is first.

We offer professional services, so our excellence and ability to grow entirely depends on our employees. I know the values work, and here's some proof - Ernst & Young has been honored for the past seven years on the Fortune "100 Best Companies to work for" list.

We've also made it on Working Woman's Best Companies for Working Mothers list for eight years. Ernst & Young's values of integrity, respect and teaming apply to over 100,000 employees around the world. My job is to make sure they are upheld in every way in the Columbus operations.

What do you look for in your employees to make sure you accomplish that?

Our work is not easy or glamorous. It often involves difficult and adversarial circumstances - for example, a complex audit or fraud investigation. And tight deadlines go with the territory. I look for people who can thrive in this environment.

My dream employee would look like this --- astute listener, flexible, resilient, ambitious and confident. He or she would be able to clearly articulate what needs to be accomplished in order to get the client engaged right out of the gate.

I also look for the ability to rally when things go south -- people who can regroup, re-energize and press on during the low points are worth their weight in gold.

What strategies do you use to attract and retain clients?

Most of our work is driven by legal or regulatory requirements, so our clients need the services we offer. There is competition, of course, so the key is to make sure people know who we are before they need our service.

Columbus is more of a big town than a booming metropolis, so it is fairly easy to get to know people. We make it our business to look at companies in town, keep current on local business happenings and to meet them personally.

The reality is that people want to do business with those they like, so we hire the best staff and then make sure companies know we are here. I personally have volunteered with social organizations such as United Way. First of all, it's the right thing to do. But it also carries the added bonus of allowing me to meet peers in local companies.

The work we do is often a necessary evil -- kind of like going to the dentist. It's not fun, nobody looks forward to it, but the alternative is less attractive. Regardless, we know that we can make it as efficient, effective and painless as possible. Kind of like what you would expect from a dentist when you need that dreaded root canal.

What do you see as the top challenge for executive women?

That's easy -- balance. For example, this week my 2- and 5-year-old sons' nanny was put in the hospital unexpectedly. Although I have back-up childcare, my week quickly went into a tailspin. Even with supportive and involved husbands, most women still end up doing it all. It's exhausting at times.

I believe this is why there are not more women CEOs. It's not a glass ceiling or ability issue. The only barrier I see to women securing key positions is their own desire to set limits.

For me personally, although my job is rewarding and important, I am not willing to sacrifice my home life to get ahead.

How to reach: Ernst & Young LLP, (614) 232-7159

Wednesday, 28 February 2007 19:00

Creative genius

Pam Gaffen works hard and plays hard, and she wants her employees to do the same.

“I am constantly searching for innovative ways to reward and motivate our employees,” says Gaffen, co-founder and co-owner of Gafcon Inc., a diversified construction consulting company. “My instinct is to nurture my staff. I believe employees who work and play hard and are consistently rewarded for their efforts are the most loyal.”

As part of those incentives, Gaffen provides lunch each day for employees and offers flu vaccines each year in the office.

“As a result, we have very few people out of work during flu season,” she says. “This is a real win-win. When an employee misses several days of work, it costs the company a significant amount of money in lost productivity. It makes sense to pay a doctor to administer shots rather than to take this risk.”

Gaffen founded Gafcon with her husband, Yehudi, in 1987, and today, the company has 100 employees. Gaffen’s husband runs the business development side of the company, while she handles operations.

Smart Business spoke with Gaffen about how she motivates her staff and manages growth.

Q: What key skills does a leader need?

The ability to hire and retain outstanding employees is essential. We don’t build machinery or sell a physical product. That’s not where our assets are; our business is all about people. Our assets go up in the elevator in the morning and go down at night.

To find the best employees, I start by reviewing their resumes. I tend to focus first on longevity. Our company is not meant to be a revolving door for employees. We are looking for employees to invest in our future and be part of the growth and reward of our organization.

During the interview process, I depend on my managers to assess technical abilities. I observe the applicant’s interactions during the process and rely on my intuition when making a hiring decision.

After bringing the best employees on board, great leaders keep them inspired and move them forward careerwise. I believe in allowing employees to expand their horizons. Sometimes a great employee will become intrigued with a different role in the company but lacks the education to be considered.

I will help him or her get the training and education needed. It can be the best investment you ever make. Not only does this employee now bring a broader base of skills and knowledge to the organization, they also feel a heightened sense of loyalty.

Q: What has been your greatest challenge, and how did you overcome it?

Growth can be a real challenge. We have had years involving 30 to 40 percent growth, and it’s been tough to keep up. Growth needs to be well-managed. Otherwise, it can get out of control quickly.

Some years will be flat, and that can be a blessing. You need time to catch your breath in order to do thoughtful planning for the future. Continuous huge jumps are not always healthy.

Another challenge was staying ahead of the technology curve. With changes occurring at such a rapid pace, we decided to make a significant investment in current and future technologies, giving our employees an opportunity to truly innovate.

One important area we addressed was the Web-based document management and collaborative portal environment. Today, we are starting to see a positive return on those decisions by empowering our people with better tools to do good work, while at the same time increasing value to our clients by providing anywhere/anytime access to information.

Q: How do your inspire creativity in your staff?

Creativity flows in properly managed brainstorming sessions. I constantly invite my employees’ opinions and regularly act upon them.

During these brainstorming sessions, I throw out ideas that may seem off the wall or unrealistic. This opens the door for out-of-thebox thinking from the group.

You can’t have real creativity without a comfortable and spontaneous flow of ideas — including what may seem like silly ones. My job is to take all these ideas and filter out the jewels.

Q: How do you multitask?

I wear many operational hats, including legal, financial, IT, HR and marketing. I must rely on good talent, but I also need to be extraordinarily efficient. This includes careful delegation, organization and maximizing use of technology that helps me get the most out of every workday.

One other practice that has worked well for me is to work hard while at work but refrain from bringing work home. Especially in light of the fact that my husband and I are co-owners, it is important to have boundaries.

I want my personal space at home to reflect an aspect of me other than the professional. If I have work papers strewn everywhere or constant conversations about work while at home, I cannot achieve balance.

HOW TO REACH: Gafcon Inc., www.gafcon.com or (619) 231-6100

Wednesday, 31 January 2007 19:00

Socially responsible leader

Karen Cebreros sees herself as much more than a coffee developer and importer. After a trip to Peru in 1989, the founder and president of Elan Organic Coffees Inc. was inspired to help farmers save their land and improve the health of their families by teaching them how to implement healthy organic agricultural techniques. “My priorities were changing at the time,” Cebreros says. “I was 36 and had recently been diagnosed with a serious heart condition. I had a keen desire to make a lasting and meaningful difference during my lifetime.”

She’s doing that through her company, a coffee developer and importer of certified organically shade-grown coffees developed through partnerships with village co-ops in Central America, South America, Ethiopia and Papua New Guinea The company posted 2006 revenue of about $10 million.

Smart Business spoke with Cebreros about the importance of never giving up.

Q: How do you lead and manage change?

It all comes down to the people you employ. I hire for attitude and train for skills, which makes the job of leading change much easier. While change is always a challenge, with the right caliber of employee, it does not have to be an uphill battle. You can have a mediocre product, and if you have fantastic people, it will sell. Likewise, even the most excellent product will produce lukewarm results if you have an unmotivated staff.

Q: What key skills must a leader possess?

A willingness to be surrounded by people smarter than you. This includes not only employees but also business partners. Business owners tend to be headstrong and a bit stubborn. You need people on your team who will force you to listen and are not intimidated by your position.

This should go without saying, but you need to display the highest level of integrity and deal with people sharing the same value system.

The ability to get back up when you are knocked down is essential. As Winston Churchill said, ‘Never, never, never give up.’

Strong leaders must be nimble and willing to change direction when needed. They do not get attached to an outcome. When the circumstances change, you need to react accordingly.

Q: How do you make decisions?

Decisions are made by the group. We don’t hire clock-watchers — our employees are the best and brightest. This allows me the luxury of stepping in only when there is an impasse.

I set the course for the business, but the business is certainly not all about me and what I think.

Making mistakes develops judgment, so I do not beat myself up over ‘failures.’ You can make many mistakes — the key is in learning and not repeating them.

Consistency is often more important than being right. Do what you say, even if it is wrong. People must be able to rely on your word and not play guessing games.

Micromanagement does not work. Fortunately, it is not my style. For those leaders who tend to get overly involved, remember this — you are not developing the skills of your staff. Micromanagement can be a strong demotivator.

Gut feeling or instinct cannot be underestimated. I do not go through a risk/reward analysis when I make decisions. It’s simply a matter of gathering the facts and moving forward on the information known at the time. You can always change directions if needed — it’s important to at least keep moving.

HOW TO REACH: Elan Organic Coffees Inc., (619) 235-0392 or www.elanorganic.com

Friday, 24 November 2006 19:00

High achiever

Pamela Springer has always aimed high. Her history of success goes back to the early ’80s, when her college basketball team at Franklin University made it to the NCAA Final Four. Since then, she’s succeeded in leadership positions at a number of tech companies.

Today, she is CEO of ECNext, which builds and manages commerce stores.

“When I joined ECNext in 2003 as VP of sales, we only had four customers; we now have 55,” says Springer of the 40-employee company.

Smart Business spoke to Springer about why every company needs irritants and why CEOs need mature egos.

Q: What leadership qualities are essential?

Accountability is at the top of the list. Great leaders operate more as coaches than dictators.

They are clear with their direction and concise when it comes to explaining goals. However, they allow flexibility within parameters.

Ego maturity is also vital. Smart leaders are not infallible, but they know how to ‘fail fast.’ In other words, they are not afraid to make a mistake, learn from it and move on.

Our business, by nature, involves lots of experimentation before we discover what really works. So, if we do not periodically miss the bulls-eye, we are not operating aggressively enough.

Drawing on the expertise of others is another sign of ego maturity. I am by no means the smartest person, but I can be resourceful enough to tap into others’ strengths. I am not afraid to make decisions, but I am surrounded by people who are very capable of helping me make them.

I am not afraid to lean on others, and that takes a certain amount of humility.

Q: What mistakes does a CEO need to avoid?

One of the most costly mistakes any leader can make is not filling positions with the right people. The saying ‘hire slow, fire fast’ is so true.

You have to really evaluate the trade-offs if you bring someone on board who has never done the job before, regardless of how talented they might be. On-the-job training is expensive and risky.

Another mistake is what I call creeping logic. This involves putting effort into justifying solutions and decisions that no longer work. It is important to put your ego aside and change with the times, rather than become emotionally attached to an idea whose time has come and gone.

Cash flow is of paramount importance. You can never have enough cash. I put a lot of energy into aggressively managing and monitoring our cash flow.

Q: What advice would you give a brand new CEO?

Take a look at your constituents and evaluate who has priority. For example, we have three in our business — our employees, customers and investors. While they are all vitally important, there can only be one No. 1.

There are times when the primary focus needs to be on the employees. Perhaps the job market is tight, and our primary concern is retaining talent. There are other times when customers are the main focus. You must be able to identify the cycle you are in, determine what’s a win and know what it will take to get you to the next cycle successfully.

Q: How do you motivate and empower employees?

Motivation comes from within, but we can set the right environment to help our staff flourish. I believe every company needs irritants. By that, I mean employees who challenge the status quo.

It is dangerous when you drink too much of your own Kool-Aid. Group-think does not propel companies forward. It is dangerous to get too comfortable and complacent.

You need irritants to keep everyone sharp. I strive to communicate to my staff that it is okay to disagree. This behavior needs to be rewarded rather than punished or discouraged.

Q: What qualities do you look for when hiring?

I look for employees who not only can do the job but will do it. Many are capable and competent but lack the drive to push their limits.

The most desirable employees have prior exposure to the business we are in but are not stuck in their ways. They are open and adaptable to our company’s culture and vision.

Ego maturity is something I always evaluate when making hiring decisions. Can this person receive input? Are they going to be interested in the company’s success, or self-absorbed or self-focused?

Finally, being a team player cannot be overemphasized. If someone else comes up with a great idea, will they embrace it or react in a competitive manner?

HOW TO REACH: ECNext, (614) 682-5103 or www.ecnext.com

The Women in Business series is presented by Smart Business through the support of Fifth Third Bank.

Sunday, 21 May 2006 20:00

Poised leadership

Deni Tato has always known she would do well as a leader. Not only was she bright growing up, but she had incredible self-confidence.

“I was one of 11 children,” says Tato, president and CEO of Contract Interiors, one of the largest commercial furniture dealerships in Cincinnati. “My mother did not know what to think of my confidence at times. She would ask me, ‘Who do you think you are?’ But the truth is that I always had a strong sense of who I was and what I wanted.”

Tato put her confidence and drive to good work when she began leading Contract Interiors. And her leadership has paid off: The company’s revenue in 2005 was $12.5 million, and Tato projects 2006 revenue of $15 million.

Smart Business spoke to Tato about how she accepts mistakes, finds the right employees and earns respect.

How do you recruit and retain great employees?
If you are running a healthy company, your employees are your best advocates. They will promote your company as a fantastic place to work.

When we find a candidate with the right skill set, that is just the first step. The next, and perhaps more important, is to ensure they fit into our company culture. You will not confuse Contract Interiors with another office furniture company. We have a distinct culture where motivated and self-directed employees flourish.

I sit with every new employee and tell them they can be here 30 days or 30 years — either one is fine — and I mean it. I believe in cutting my losses quickly if the fit is not a good one. Typically, 30 days is enough time to determine this.

How do you handle employees’ mistakes?
One of our greatest strengths is our healthy view toward mistakes. Most corporate environments train people to fear mistakes because they are punished. We literally celebrate mistakes because they are great growth and learning opportunities. In fact, we used to reward employees in staff meetings for the biggest screw-up by giving them $50.

Although we don’t do that any longer, we still have the same perspective toward mistakes. This is a safe environment where people can be human and authentic. Failure is viewed as a stepping stone to bigger and better things.

How do you earn the respect of employees?
I can only communicate effectively if I have credibility. That means delivering on every commitment. Employees want to follow a leader who is respectable.

To be respected, you must earn credibility by showing integrity and commitment at all times. There is no margin for error.

How do you maintain a strong customer base?
It’s not complicated. We practice the Golden Rule, which is the key to happier customers. We have also modified our approach over time from expecting employees to be jacks of all trades to a more specialized approach.

We are able to draw on the strengths and talents of our staff and customize a winning team to complete a particular project. It essentially comes down to putting the right people in place depending on the priorities of the project.

What is the most important business lesson you’ve learned?
When we expanded our operation to another city, I went into it with lots of confidence. After all, the city was close by, and we certainly knew how to sell furniture. Unfortunately ... I ultimately had to close the operation. Through this experience, I realized how essential it is to have leadership in place who embraces the same value system and management philosophy.

They must have a common unchanging purpose that mirrors your own. If you choose to expand your business, pick your leaders carefully.

How to reach: Contract Interiors, (513) 641-3700 or www.contractint.com

Sunday, 26 February 2006 19:00

From setback to success

Starting a business is scary enough, but it can be even more so after failing with another business.

Sharon Cannarsa was faced with that situation, but took the plunge and succeeded.

The president and CEO of Systrand Manufacturing Corp. and her husband, Tony, combined his engineering expertise with her administrative skills to form an oil coupling business in 1977.

“The oil business was booming at the time, and we enjoyed running a thriving operation until the bottom fell out of the industry and our company did not survive,” Cannarsa says.

After this experience, a secure job working for someone else would have appealed to most, but not to Cannarsa.

“I need the freedom that being a business owner allows,” she says. “Also, if you tell me something cannot be done, look out. I am going to show you it can.”

Cannarsa’s fighting spirit led her and Tony to begin Systrand, a machine supplier to the automobile industry, in 1982. She explains the business in simple terms: “If it has anything to do with the transmission or engine, we make it.”

With facilities in in Brownstown, Danville, Ill., and Busan, Korea, Systrand employs 330 people, generates annual revenue of $75 million and serves customers including Ford, GM, Chrysler and Volkswagen.

Smart Business spoke with Cannarsa about how she motivates her staff and how she plans to grow the company.

How do you keep your competitive edge?
We keep our finger on the pulse of customer satisfaction constantly. Our buyers are not shy about telling us if we miss the mark, and we encourage their candor. There is always somebody trying to do what we do faster, cheaper and better, so we challenge ourselves to stay on top of our game at all times.

You cannot rest on your laurels and become complacent in this business, or any other, for that matter. Our growth strategy revolves around areas in which we have the competitive advantage, so we are always capitalizing on what we do well rather than going in many different directions.

My sons, Anthony and Michael, serve as VPs. They ... brought fresh and new ideas to the business. We hire people who challenge the status quo and look for better ways to get the job done.

How do you keep your staff motivated?
I am a firm believer in promoting from within. I only go outside the company to hire talent when absolutely necessary. It gives employees good self-worth and commitment to the organization when they can see opportunities to grow.

I strive to give back to the employees as much as possible, in both big and little ways, because both are important. For example, I host special lunches to show my appreciation to staff.

We have newsletters that spotlight birthdays and other special occasions. We have a tradition of an annual holiday party, including half a day off with pay.

How will you continue to grow your business?
My strategy has not been focused on growth only. Manageable and profitable growth is what I strive for at all times. In fact, I am proud of the restraint we have shown in passing on projects that would not be advantageous on a long-term basis.

Our biggest challenge right now is the threat of low-cost global suppliers. Our Korea facility, which has been in operation for six years, was, in part, a response to this threat. We were getting our castings shipped from Korea to Michigan and found we could save significant shipping costs by machining the items in Korea.

This global expansion has proved to be a wise decision, and I would not rule out future decisions along these lines.

There are two areas that interest me in terms of expansion. First, I want to get more involved with our customers on the design aspect of the business. I believe we have much to offer in this area, and our customers have shown interest in this sort of partnership, as well.

Second, I want to increase our efforts manufacturing high-value-added machinery in modular assembly.

How do you keep your life balanced and productive?
I take one day at a time. There is stress in any business, but I have found the best antidote is a positive attitude. Looking on the bright side, keeping your priorities straight and knowing that if today is horrible, tomorrow is bound to be a winner.

Those are the things that keep me balanced and productive. My business is important to me, but family and service to the community can never be neglected.

How to reach: Systrand Manufacturing Corp., (734-479-8100), www.systrand.com

Tuesday, 27 December 2005 06:38

Measuring success

It might be the survival skills Rhonda DeMuth grasped at an early age as one of 11 children.

Or perhaps it is her strong educational background, which includes a bachelor of science degree in mathematics from Minnesota State University and an MBA from the University of Dayton.

Or it could be her practical experience — 25 years with three national and regional consulting firms and experience as a manager and software engineer.

Whatever the magic formula might be, it spells success for DeMuth, who serves as chairman and CEO of TDCI, a consulting and software organization that helps manufacturing companies improve their business performance.

DeMuth, hired by TDCI in 1993 to direct and develop the Technology Services practice and named president in 1997 before being named chairman and CEO, says the last five years have been hectic ones for the company.

“We’ve grown from 27 employees to 70,” she says. “It’s been a challenge, but one thing is for sure: When you are in IT, you do not have the luxury of standing still.”

In 1999, DeMuth was named a finalist for Ernst and Young’s Entrepreneur Of The Year Award. In 2000, the Industry and Technology Council of Central Ohio honored her as Executive of the Year and the Columbus Chamber of Commerce awarded her Small Business Person of the Year. And TDCI was named one of Columbus’ 50 fastest growing companies in 1998, 1999, 2000, 2001, 2003 and 2004.

Smart Business spoke with DeMuth about how she’s managed the company’s fast growth and how she’s overcome her biggest challenge.

How have you managed the rapid growth of your company?
During the past seven years, our sales have increased from $2 million to $10 million and our client base has grown from 50 to 320. We’ve worked hard to keep our finger on the pulse of our clients’ needs and to acclimate them to current technology.

Manufacturing industries were one of the last to merge into the Internet highway. TDCI has helped them navigate. In addition to MAC-PAC [an enterprise development system], we also offer BuyDesign, a new suite of software solutions developed to help manufacturers streamline the design, sales and production of highly customized products.

How do you measure success?
The most obvious measure is profitability but you have to go deeper than that. I don’t think you continue to operate in the black without exemplary customer service. That’s the real litmus test of success.

We constantly monitor whether or not we hit the bulls-eye of satisfying our customers’ needs. We review retention statistics [targeting no less than 95 percent retention], customer referrals and our level of repeat business. In addition, the director of our support group randomly calls a number of customers each week to determine if we exceeded their expectations in terms of the help-desk support offered.

How do you keep your management skills sharp?
I’ve learned a lot through the school of hard knocks. One of my first lessons was to stop taking on more responsibility for employees’ careers than is healthy and necessary. As owner of the company, I used to feel obligated to keep people employed and tended to overlook issues and avoid holding them completely accountable.

Over time, I discovered that this is not a healthy management mindset. Poor performers must be swiftly addressed because it is unfair to those who are pulling their weight.

What’s your greatest business challenge?
Going into markets where we have no name recognition is difficult. We inherited a client list when we took over MAC-PAC from Anderson Consulting, but we hardly ride on the coattails of that experience.

We’ve beefed up our marketing and sales focus recently. Software companies typically require more spending on sales and marketing, whereas service industries require much less of an investment.

Through this investment, we are focusing on expanding relationships with existing customers and cultivating new ones by advertising in industrial trade magazines, frequenting trade shows, mass e-mailing and cold-calling prospective clients from lead generation lists we have purchased.

How to Reach: TDCI, (614) 781-2325 or www.tdci.com