“We’re not in the business of running the businesses,” Strike says. “We are coaches and trainers, people who consult and help people run their businesses.”
And that is the bare bones behind Martin Franchises’ management style. The company isn’t hands-on, and it doesn’t micromanage. Instead, it places its trust in the store owners.
“Our feeling is that franchisees run a better store than we can run ourselves, because they are on-premise and focused on the success of that store,” Strike says. “We think our expertise is in bringing franchisees together in a way that works synergistically for everyone’s benefit.”
That highlights two of the main benefits to running a franchise operation plenty of experience to draw from and the ability to specialize. Store owners are allowed to focus on what they do best running the store and Martin Franchises then has the time and resources to do what it does best focus on the big picture.
And that is revitalizing the Martinizing Dry Cleaning brand. The first Martinizing Dry Cleaning stores opened in 1949, and by the 1960s, there were thousands. But when business started to dwindle, the company stepped back to take stock.
In 1987, it designed a new franchise agreement, offering improved support in the form of marketing and advertising packages, public relations consulting and equipment assistance in exchange for a royalty of 4 percent gross annual sales and an advertising fee of 0.5 percent monthly sales. And it’s taken steps to hone in on its target customer, households with median income of $60,000 or more. Martin Franchises does this by keeping prices pretty average neither the highest nor the lowest in any market while providing the best service.
“We’re not going to be the lowest-priced cleaner in a market; we don’t want to be,” Strike says. “That does not give us the revenue we need to provide our customers the service they want. We try to provide an excellent service, excellent quality at a very reasonable price really provide an excellent value.”
This approach is one of the benefits of more than a half-century of business experience.
“It’s just a question of training,” Strike says. “[It’s from] working with a lot of stores over a long time and a lot of different markets, gaining that experience, sharing that experience between franchisees and developing slowly, over time, that reputation with customers.”
And today, the company is taking that experience and reputation into new areas in the United States and abroad.
“We’ve been around for a long time more than 50 years,” Strike says, “and a lot of the stores are older stores, so as demographics change and neighborhoods change and stores and shopping centers change, a lot of those old stores are dropping out, closing. It’s just a natural lifecycle, if you will, and we happen to have a lot of stores that are nearing the end of their lifecycle.
“But we’re replacing them with new, high-quality stores in high-growth markets. So the total number of stores happens to be dropping down in the U.S., but it’s just part of a natural growth, a natural process of aging and change.”
But while the number of stores domestically has dropped over the past five years from more than 500 to fewer than 400, the number of international stores has steadily increased from just over 150 to almost 250.
“It’s kind of like pruning in some ways,” Strike says. “We prune the stores that are no longer in the markets or neighborhoods where our key customers are. And try to put in new stores in places where we want them.”
That includes places such as Mexico, Ecuador, Peru, Hong Kong, Japan and Germany, in addition to a renewed focus on American cities such as Nashville, Orlando and Phoenix It might sound daunting to target such vastly different areas, but Strike insists that opening foreign markets isn’t all that different from opening domestic markets.
“Right now, our approach to foreign markets would be similar to what we’re doing in the United States, which is that we would like to find franchisees who are capable of opening multiple stores themselves to be the core in any particular market,” he says.
Strike says the biggest challenge to going international hasn’t been a language barrier or cutting through government red tape. The biggest problem has been distance.
“The challenge for us is being able to establish a big-enough presence in any foreign country to be able to justify the overheads involved, to provide support to the franchisees,” Strike says. “It’s more just a question of distance, distance requiring a sufficient size.”
And there are other considerations that go into market selection, whether that market is domestic or international.
“We look at markets which we feel have the potential to handle the growth of our putting in several dozen stores in a market,” he says. “And we look at stores where we have a kind of open territory, without a big presence, where we could find an area developer who really wanted to go in and put in multiple stores themselves, and we could offer them kind of an open field to do that.
“Most of these markets are areas where we’d expect there to be two, three, four area franchisees who would take parts of the market and develop them.”
Once Martin Franchises decides to open a new market, the most important factor becomes finding the right location.
“We look at the demographics, at the quality of the center, at accessibility, we look at visibility, we want to make sure we’re on the correct side of the street, we want to make sure, in short, that it’s easy for our customers to notice us, recognize us and get to us,” Strike says. “We want to provide as easy an experience as possible for them to drop their clothes off and pick their clothes up. We prefer drive-through locations, if possible, and we want to make sure there’s plenty of parking.”
Once markets are selected and store locations opened, the biggest issue becomes quality control. How, with so many different stores in so many different locations, can Martin Franchises guarantee they’re all living up to the Martinizing Dry Cleaning brand and reputation?
Training, training, training, says Strike.
“Working with our franchisees so they know what’s involved in providing a quality service to their customers,” he says. “Its not just about how you clean the clothes, it’s also about how you greet the customer, how you package the clothes, how you take care of them, how you make sure they get the clothes back, a whole variety of things that are involved in providing good customer service. Meeting the customers’ needs, promoting quick turnaround, quick service, all those.
“So what we do is, we train our franchisees and continue to work with them so that they know how to offer all those things at a price that’s reasonable and provides a good value.”
Each new franchisee must go through a training course before opening his or her store. The course consists of one week of both classroom and hands-on training at Martin Franchises headquarters in Loveland, and another 60 to 80 hours of training in the franchisee’s own store.
After the crash course in dry cleaning, headquarters keeps in touch with franchisees through multiple avenues, from annual regional meetings to a toll-free helpline. And the company drops in on owners periodically to see how they’re doing.
“We have regional managers who visit the stores, inspect, do quality checks and work to train the staff at each individual store to learn to recognize quality and produce it,” Strike says.
But there is some room for individuality in the franchise business. Strike tries to ensure that each franchisee has the power to make the business right for them, without straying from Martinizing standards.
“We try to establish a firm set of guidelines as to how to run a store,” says Strike, “And then tailor the implementation of that very specifically with each franchisee, allowing them to make decisions to run their own business.”
Built-in flexibility is essential in managing a franchise, says Strike. Because while there are definite benefits to operating through franchises the ability to expand quickly, to have many stores and still maintain close contact with each through the owners there are also disadvantages, namely dealing with varied personalities in an organization that relies on standardization.
“You have to work with multiple personalities to maintain one brand image and one approach to kind of servicing the customer,” says Strike. “And that’s the role that we play coordinating the efforts of these multiple owners and helping them get the benefits of working together. It’s not easy.”
But that doesn’t matter to Strike. He says Martin Franchises will stay on top by continuing to tweak its approach to helping store owners and keeping everything in balance.
How to reach: Martin Franchises Inc., http://www.martinizing.com
What he didn’t see were the multiple hurdles his company, General Data Co. Inc., would have to clear to introduce its technology to the labs. If he had, he says, General Data might not be on the verge of cracking this potentially huge market.
“Sometimes you do it in spite of yourself because you don’t fully understand all of the obstacles, and if you did, you would have pulled the plug two years earlier,” says Wenzel, founder, president and CEO of the nearly 200-employee company.
Wenzel launched General Data in Pittsburgh in the 1980s, then bought a Cincinnati company involved in barcode technology and moved his business here. It’s found its niche in hard-to-barcode applications.
One client, for example, wanted to apply labels to oily parts without having to clean them first, and General Data came up with a solution. Another innovation: A hospital patient identification wristband that includes a photo of the patient and other data to avoid mix-ups in medications or testing.
Wenzel talked with Smart Business about penetrating a fragmented and unfamiliar market at the right level, sustaining a spirit of innovation and choosing the right opportunities to pursue.
How does General Data stand out from other companies in the barcode industry?
Our forte is the difficult-to-barcode or the difficult-to-apply automatic identification. Typically, from a consumer standpoint, if they think of barcodes, they think of the UPC code on the side of a cereal box.
That is not our business at all. We specialize in on-demand labeling, typically in a manufacturing or distribution environment where variable data needs to be applied online or during the process, i.e., either a serial number needs to be created, a lot number, a weight, some variable data that cannot be predetermined, and so the basis of the business in the early days was to come up with the hardware/software and the media to print variable data in nasty environments.
Where is the largest concentration of your business?
Manufacturing in general, although in the last four years, we’ve made a huge commitment to health care. The other application that is huge we believe that General Data is the world leader in the segment of laboratory automation. We have come up with a patent-pending process where we can apply a label to a pathology slide, where we can encode patient identification on each slide from a computer-generated database, which sounds real simple, and according to manufacturing best practices, had been in place for 15 or 20 years.
That’s not the case in health care. Two years ago, I didn’t know much about laboratories, but the protocols, the testing procedures that a slide has to go through and is subjected to <\m> some of them require 26 steps. No one up to this point had developed a label material that could be applied and would withstand the protocols of these tests.
How have you overcome the obstacles to entering the medical lab market?
It’s interesting when you enter a new market because once we came up with the label that actually survived this, well, it’s a good news, bad news situation when you go into a new business segment where it’s never been done before. That’s good if you capture that business segment, but you are also asking your customers to change their existing business practices, which is not only a huge challenge in any industry, but particularly so in the medical industry.
It’s a new way of doing it, especially in the labs, because they use all the equipment from the lab automation companies, the ones that make the testers and the processing equipment they use. The lab may want to adopt our technology but the software to be able to deliver the patient information to a printer at the right place in the sequence of events didn’t exist. So we’ve had to work, in essence, with the OEM suppliers of equipment to labs, and to their systems and to their databases. We’ve said ‘Look, guys, we’ve come up with this wonderful invention and we can automate this process, but we need your help to either open up your software or make software changes so that we can get at the data.’
It’s not that they don’t want to do it and they want to see more errors, but they already have 10,000 requests from their customers and they only have ‘X’ that they can accomplish. So we had to develop a groundswell with early adopters to prove the technology and prove the increase in effectiveness in the lab and prove the decrease in errors so that now it’s getting legs, and our customers in the labs are now in a position where they can put pressure on the third-party equipment suppliers to work with us.
We finally had some major successes just within the past six months where we’ve had some of these large companies say they understand.
How is the health care industry different from other industries?
It’s the best in the world because it’s entrepreneurial and it’s fragmented. It’s also very slow to adopt industrywide standards because it’s entrepreneurial and fragmented. The government has been hesitant, but in the past couple of years they’re starting to put more pressure on the industry because there’s been a huge lack of uniformity in standards.
What’s interesting is they’ll all come up with the same answer at the end; it’s a different way of getting there and, unfortunately, there are hundreds of different ways of getting there.
How did you persuade medical lab companies to work with you?
The technology is so compelling, if you can just get all the parts and pieces and people involved to buy in and make it work. A, it’s compelling from a cost justification standpoint and, B, it’s not like tracking steering wheels that are going to Honda. You’re actually going to potentially save someone’s life.
So the business case for it is so compelling that we just needed to be able to show that we had a product that actually worked. It had been tried several times in the past and there were several failures out there, so that actually made it more difficult. Even some of the early adopters were very skeptical.
How do you keep the innovation coming?
We try to stay energized at the top. Some of it comes from our hiring attitude. I’d love to always have somebody smarter than me, but give me positive attitude over perceived brilliance any day and we’ll get there.
I think we have an excellent reputation as innovators. We tend to attract people who want to do things outside of the box. We don’t say no enough, perhaps, to our customer base, and that’s part of it. On just the labeling side and the industrial and the strange applications, 70 percent of that part of the business is sold to resellers, so we probably have a thousand-plus resellers across the country who are selling into labeling environments, and they come to us daily with, ‘Can you do this?’
How do you decide which products or ideas to develop?
It’s a combination of a specified process with a heaping mixture of gut feel. Some of it is anecdotal. We try to keep track of the application and try to get feedback from the dealers, keeping tabs on if we make this product, how many can they sell.
And, of course, every one of them could sell millions if only we could make them. We give the problem to our alchemists, who turn paper and film into gold and stir the secret sauce and come up with a product.
What challenge must General Data meet going forward?
One challenge is to look at how we manufacture and whether we can make a quantum leap and manufacture more of the base materials rather than purchasing them. It’s that classic make-or-buy decision, and it’s megamillions of dollars.
And it’s not just a cost consideration. When we’re doing such innovative things, if we had the volume of the product that we were manufacturing, then we could dedicate some of that manufacturing expertise to tweak and fine-tune a component we may need for a developmental project. Whereas right now, if you’re not making the next level in the supply chain, you have to rely on outsiders and beg and plead and say, ‘I only need half a drum of this to test my theories.’ And if you don’t make that half a drum it can be tough.
Another, again on the medical side, is to broaden the product to additional pieces of equipment and to be able to roll that out on a worldwide basis. We are getting requests from literally all over the globe, and putting together an international marketing force is a challenge. How to you find out who’s the best laboratory automation company in Singapore? And when you’re trying to sell something that’s brand new, it just doubles the challenge.
How to reach: General Data Co. Inc., http://www.general-data.com
When meeting with these students, the questions often posed center around the assessment of their prior learning and how it can best be applied to their area of college study, including, how have the experiences and learnings of your life influenced you? What have you learned outside the classroom that can enhance your college experience? What skill sets and knowledge do you bring with you to college?
Experiential learning is experience-based learning that occurs outside the classroom. It is the skill set you acquire along the way to becoming a business professional. The Council for Adult Education and Learning (CAEL) defines prior college level learning as learning that is:
- At a level of achievement defined by faculty as college equivalent
- Applicable outside the context in which it was learned
- Reasonably current
- Includes both a theoretical and practical understanding of a subject area
Examples of experiential learning
- Experiential learning covers a broad spectrum of experiences.
- Structured programs in the Armed Forces, nursing or business
- Regionally nonaccredited coursework from a business school, Bible college or art academy
- Comprehensive corporate training or a series of workshops
- Extensive volunteer or community service
- Extensive reading in a concentrated subject area
- Proficiency in a foreign language
Questions to ask yourself
When exploring your experiential learning options at a college, ask yourself the following questions.
- Do I have mastery of a knowledge or skill set?
- Can I apply the knowledge or use the skill in a variety of settings?
- Can I verify this knowledge or skill set? How?
- Can I demonstrate the relationship between what I’ve learned, my own goals and my degree program?
Tying it all together
Credit is not granted for the experience itself but for the learning and skills that have been acquired from that experience. How do you tie all this together?
Depending on your background, experiential learning credit may take several forms.
- College Level Examination Program (CLEP). CLEP exams are standardized, subject-specific tests that provide an opportunity for students to prove what they know. Exams are offered in an array of subjects, including management, accounting, marketing, macro and microeconomics, history, psychology, foreign languages, etc. Many colleges award credit for receiving a passing CLEP score. Visit www.collegeboard.com.
- Defense Activity for Non-Traditional Support) (DANTES). Standardized examinations used to assess competency in particular areas, such as history, math, management, psychology, banking/finance and physical sciences. Visit www.getcollegecredit.com.
- ACE evaluations. The American Council on Education has independently evaluated thousands of programs and produced college credit recommendations for noncollegiate sponsored programs and military trainings. Visit http://www.acenet.edu or http://www.militaryguides.acenet.edu
- Portfolio development. A process based on work experience whereby a student documents their learning and skills by assembling a binder in a predetermined format that highlights what they learned, how they learned it and how they applied it.
- Validation. A process similar to the portfolio development but used for documenting nonaccredited coursework or extensive training/workshops.
- Departmental or challenge exams. These are college-specific tests that enable students to prove their mastery or expertise in selected subjects.
As with anything in life, there are exceptions, so check with your college of choice to see which experiential learning options they endorse and accept.
Jennifer Querner, M.A., is the credit for experiential learning coordinator at the College of Mount St. Joseph, where she works with nontraditional and transfer students who are equating skills and life experiences with college credit. For more information, visit http://inside.msj.edu/academics/cel/
Sweep accounts are the easiest and most efficient way to manage the investment of your operating cash. A sweep account is a bank account from which, at the close of each business day, the bank automatically transfers amounts that exceed a certain level into an income-earning account or investment. Your working-capital needs are taken care of; excess funds earn income overnight; and, best of all, you don’t lift a finger. However, you may not be aware of the many ways to make a sweep account work for you.
Money market investments
Until recently, funds transferred to sweep accounts were usually invested in traditional money market investments, such as repurchase agreements or commercial paper. These short-term investments feature flexible maturities that react daily to changes in interest rates. Other investment options may not react to interest rate increases for up to 30 days, making money market investments an ideal place to park funds on a temporary basis. The funds are swept from your account after the close of business and returned the next day, along with any accrued interest.
Money market mutual funds
While repurchase agreements and commercial paper remain a viable option, money market mutual funds have become attractive to businesses due to strong ratings and diversification. These accounts allow you to determine how much operating cash you need on a daily basis, and keep the rest in a flexible money market mutual fund account to continue growing. Unlike traditional sweep accounts, the money remains in the investment account until needed in your checking account. Any cash above the account’s target balance is invested in the sweep account at the end of the day. The sweep investment balance is still available to the business, if needed.
If your business requires as little as $100,000 in daily operating cash, a sweep account may be quite useful. A low monthly fee is usually associated with sweep accounts generally less than $200. You may choose to stay with the more traditional sweep accounts involving repurchase agreements or commercial paper, based on your investment policies and guidelines. Money market mutual fund accounts, however, allow for greater flexibility in investment type (including tax-exempt options and diversification).
If you’re looking for a short-term, but not day-to-day, way to manage excess operating cash, a direct investment may be a good option. Direct investments enable you to invest some operating cash in an interest-bearing bank deposit, a U.S. Treasury bill, commercial paper or short-term, tax-exempt municipal bonds. These are generally 30-day to 90-day investments, with higher yields than traditional sweep accounts.
Keep in mind that direct investments are also more complicated and require more monitoring. Direct investments are appealing for those businesses that are willing to take on a little more risk and have at least $5 million to $10 million in assets to invest. They are a good fit if you can identify this amount of expendable operating cash each month. However, if you redeem a direct investment early, there may be a risk that the investor could lose money.
While it may take some time to learn the complexities of each sweep option, it may be well worth it especially in an environment of rising interest rates. Call on your trusted financial advisor often, if necessary for more information about all of your options.
This was prepared for general information purposes only and is not intended as specific advice or recommendations. Any reliance upon this information is solely and exclusively at your own risk.
Ben Willingham is senior vice president and sales manager for corporate banking in Ohio at PNC Bank, National Association, member of The PNC Financial Services Group Inc. Reach him at (513) 651-7558.
Gehlmann comes to First Financial from Manatt, Phelps & Phillips LLP in Washington, D.C., where he served as counsel to public and private companies, as well as investors, underwriters, directors, officers and principals regarding corporate securities, banking and general business and transactional matters. He has represented community and regional financial institutions throughout the country during his legal career.
“We are very pleased to welcome Greg to our company and our senior management team,” says Claude E. Davis, president and CEO. “He will be responsible for many issues, including legal management, corporate governance, investor relations, and regulatory and compliance concerns.”
Gehlmann earned his bachelor’s degree in political science at The University of Dayton, a master’s degree in political science from The Ohio State University and a juris doctorate from The Ohio State University College of Law. He is admitted to practice in the United States Supreme Court, the District of Columbia and in Ohio. He is a member of the Ohio, District of Columbia and American Bar associations.
First Financial Bancorp also added Richard E. Olszewski and William J. Kramer to its board of directors.
MODERN OFFICE METHODS
Modern Office Methods (MOM) named Craig Cassady vice president of sales for the newly created Pure Water Technology Division.
Cassady is responsible for managing and overseeing sales efforts for the division in Columbus, Dayton and Cincinnati. MOM serves as the exclusive regional distributor of PHSI Pure Water Technology, a proprietary state-of-the-art process for filtering and oxygenating drinking water specifically for workplace environments.
Prior to joining MOM, Cassady served as president and national sales manager for a manufacturing company in Cleveland. He attended The Ohio State University, where he earned All-Big Ten honors as a defensive back on the football team. Cassady earned his MBA from the University of South Florida.
YMCA OF GREATER CINCINNATI
The YMCA of Greater Cincinnati named Sandy Berlin Walker president and CEO. Previously, Walker was senior vice president of operations for the YMCA of Greater Boston, a position she held since 1993. She replaces Jerry Haralson who announced his retirement in last year after 12 years as president.
Walker’s goal is to reach further into the Greater Cincinnati community and establish viable partnerships, allowing the Y to serve more people. She has spent 26 years with the national organization and is known for building partnerships and growing revenue.
National City promoted Barbara L. Harper to branch manager for the National City branch on Glenway Avenue.
Harper is responsible for branch operations, as well as consumer and small business sales management. Previously, she worked as a branch manager at the Bridgetown and Norwood locations. She has 11 years of experience in financial services.
Harper is active in the Western Hills community, serving as a member of the Bridgetown Business Association.
GREAT AMERICAN INSURANCE GROUP
Great American Insurance Group promoted Kendel D. Standlee to president of Great American’s Equine Mortality Division. The division supports the largest equine mortality operation in the United States and is the country’s leading insurer of this specialized business niche. Under Standlee’s direction, the Equine Mortality Division experienced one of its strongest growth years in 2004 while posting the best profitability numbers in its history.
A graduate of Arkansas Tech University with a degree in agribusiness, Standlee joined North America Livestock Inc. in 1987 as an underwriter, a company purchased by Great American in 1990. He became manager of the Equine Mortality Division in 1998, and since then, the division’s gross written premium increased to more than $80 million at the end of 2004, a 15 percent compound annual growth rate.
Dynus Corp. selected Ralph Lee as vice president for human resources. Previously, Lee was an executive with Comair Inc.
In 1995, he began his career at Comair as director of human resources. He was named the airline’s vice president of human resources in 2004. He also served as the vice president of In-flight Services.
Prior to joining Comair, he worked at Union Central Life Insurance Co. and Lazarus. Lee received his bachelor’s degree in business management from Xavier University, where he also played on the varsity basketball team. He was inducted into the university’s Hall of Fame in 1999.
Instead of implementing new sales techniques or fancy new programs, Carmichael followed a different approach he focused on the basics, improving relationships with independent insurance agents and providing better customer service by completely rebuilding the company’s technology platform.
At the time, Ohio Casualty was experimenting with a new sales program, moving from partnerships with independent agents toward an Ohio Casualty team of agents, and it wasn’t working. Within two weeks of Carmichael’s arrival, he killed the program and recommitted to using independent agents as the only source of sales.
“[The situation] was, at best, guarded,” Carmichael says. “The company had had an initiative to sell direct, and that cost us some level of trust with our independent agents. They felt we were competing against them.
“The plus [of independent agents] is they’re independent, representing more than one company. And the challenge is they’re an independent, representing more than one company. We have to compete within that agency. We have to compete against, in some cases, other very formidable competitors. So we have to distinguish our services.”
To do that, Carmichael and his team developed an ease-of-use strategy that hinged on one key component technology.
According to Carmichael, there are two ways to approach new technology.
“You can go at it at the Web or the front end which is the way most companies have done it and put fancy Web pages and cool technology on an Internet platform,” he says. “Or you can do it the way we did it, and that’s go back to the mainframe and rebuild all the systems out so that they are Internet-friendly and they use Internet languages like HTML and can be integrated very easily with any other system, such as an agents system or a vendors system.
“It’s a harder, longer process but it fits the long term. It allows you to do what we’re doing now, and that’s roll out new systems. In 30 to 60 days, we can have a brand-new application up for our agents or for our own internal use, because you don’t have to do the hard-wiring.”
Revamping the mainframe gave Ohio Casualty a huge competitive advantage, making it faster and easier for agents to get the information they need.
“The main point that we’re trying to make for the agents is that we want them to stay in their system when they communicate with us,” Carmichael says. “They all have their own management information systems over 80 percent of them do and we would prefer that they not have to leave their system to get to us.
“A lot of our competitors put up a Web site that makes agents exit their own system, go into that Web site, do their processing and then bring that data back into their system. We want all of that data to be ... in their system.”
Agents simply highlight the policy or the claim, upload it to Ohio Casualty, and get an answer. “We believe that if we do that, then agents will prefer to use us versus our competition, who makes them jump through several hoops, from passwords to Web sites that they have to learn how to navigate.”
It sounds simple, but it’s taken Ohio Casualty time, sweat and plenty of cajoling to convince long-time agents that a brand-new technology platform will work better than the system they already know.
“The biggest challenge was change itself,” Carmichael says. “Agents and employees are not interested in making changes they’re comfortable with the way things work today. And when an agent is hiring new staff, he doesn’t want to have to train people on the new systems he prefers the old way because it works and it’s dependable. So the biggest challenge is to prove to people that the new systems are not only easier to use for all people, agents and employees, but they provide a more robust solution.”
To convince employees and agents, Carmichael implemented new training programs.
“We’ve done a lot of different kinds of training,” he says. “We have a very proactive call center, calling agents, walking them through the process in some cases they have to download new software hand-holding them through that.
“We’ve introduced Web-based, online training so agents can come online and do the training, learn the new system or the new application. We’ve sent marketing reps out and specialists out, face-to-face with our agents, to literally walk them and their staff through it. We’ve had good success through our help desk that’s much more reactive, so when somebody’s got a problem, they can call in and then we walk them through it.”
With the initial training done, Ohio Casualty continues to make an effort to keep technology in the front of people’s minds.
“We reinforce it through meetings,” Carmichael says. “We have meetings with our agents on a regular basis, and we’ll always have one part of that meeting where we highlight or talk about technology.”
Keys to success
Beyond cajoling and training, three key actions helped Ohio Casualty’s technology improvement program succeed.
The first, says Carmichael, was agent and customer contact.
“No. 1 is, talk to your customers first,” he says. “Find out, what do they need or want in the way of systems or access to systems with the company. We have a customer group that we bring together every six months to give us advice on where should we go for new technology solutions.”
The second key was to “make sure that the IT staff has strong project management skills. Every one of our senior people in IT have professional project management skills, and that has allowed us to introduce new technologies quicker, complete projects faster.”
The third thing Ohio Casualty did was to “make sure the product people the underwriters, the claims people, the actuaries make sure that they’re part of that [project management] team.”
Even with all three keys in place, Carmichael says, one more element is needed to tie it all together communication. Keeping the lines of communication open between departments such as IT and customer service, and between the company and its clients, is critical.
“The more clearly you communicate with people, the easier it is for them to do business with you,” Carmichael says.
Ohio Casualty’s technology initiative has paid off, making agents and the company more productive.
“The applications that we’ve put online for our employees and our agents are so much easier to use than the old way that even the die-hard old-timers who know how to navigate the old system will admit that it’s easier, quicker, faster, cheaper to use the new way,” Carmichael says.
“Not only do we enable claims to be handled more efficiently with technology, but in the agent’s office, we provide a lot of access to data through their system or through their laptop or through their PDA. They can get access to data about their customer, about the billing system, about claims, so that they have a better understanding of what’s going on, and they can provide better service to their customers.
“In turn, we provide better access to our policy administration system, which allows agents to receive all of the data in all of the policies that they have on the books with us, but more important, they can upload applications, they can upload requests for quotes and do inquiries, and they can actually issue them online in their office.”
As the company’s ability to respond quickly to customers online has increased, the amount of paperwork and number of customer service phone calls have decreased.
“We are now finding that more of our inquiries into billing, for example, are being handled online,” says Carmichael. “They don’t require human intervention. ... They can go direct to the online application and get the answer. Service has improved, and speed of getting the data or getting the answer has improved.”
Carmichael says it’s all the result of strong communication and finding the right technology that provided agents what the agents really needed “Better technology for their processing needs, for the support of their customers, and [on our end], providing ... better personnel and services that give the agents and their customers a high quality of service.”
How to reach: Ohio Casualty Group, http://www.ocas.com
After zigzagging the floor and running himself ragged, he knew there had to be a better way.
“I sat down with my operations people and said, ‘Can’t we design our picking slips where you start at one end of the warehouse and work your way to the other so you don’t wear people out?’” says Holzberger, founder and CEO of Aveda/Fredric’s Corp., a distributor of organic hair care products to the salon trade.
Holzberger’s hands-on style is anything but an excuse to micromanage; his employees enjoy plenty of autonomy. He simply believes that he can’t know his business and where it needs improvement without getting into the thick of it.
And his employees’ energy isn’t all that he’s committed to conserving. An avid environmentalist, Holzberger has made it a priority to run his business so that it, like the products it sells, has as little negative impact on the environment as possible.
A businessman with a keen social conscience, Holzberger, his company and his employees support a wide variety of charitable efforts in the Cincinnati area, from battered women’s shelters to Habitat for Humanity. But it isn’t the result of blind altruism; every decision must show some payback, and Holzberger isn’t shy about letting his customers and the public know about the company’s contributions.
“You have to stay in the peripheral vision of the consumer,” says Holzberger. “People don’t mind spending a little more if they know you’re doing something good for the environment.”
Holzberger talked with Smart Business about the value of people, the environment and the rewards of hard work.
Where did your commitment to environmentally sound business practices originate?
I hired a leading environmental consultant to come in here and tear my company apart. I paid them to tear it apart to find out what I could do better. I didn’t mind paying them, but I wanted them to tell me how I could save money in the long run. They measured our air quality, went through all of our utilities and talked to anyone they wanted. They gave us some great ideas. As an example, we had too many people in one area without enough air exchange, so people were getting sleepy so they were not as productive. When we put a new unit in, I noticed how much more productive people were.
The one thing that we weren’t doing as a company was enough carpooling. So I designated the whole first row of our parking lot to environmentally friendly cars or carpoolers. We currently have four vehicles in our fleet that are hybrids.
Years and years ago, I challenged our operations people to come up with the most environmentally sensitive packaging that we could. We kept challenging ourselves to be more environmentally sensitive. They’re proud of it, so we printed it on our boxes.
We let people know our story in our company information. So often, businesses don’t tell their story. There’s nothing wrong with that if it’s legitimate.
Another example is our packaging peanuts. I said, ‘Look, we’re using a lot of these Styrofoam peanuts. They last 99 years and they’re going into the landfills.’ Thinking of all the millions we use over the years, it was really bugging me.
So I challenged our people to find something that could replace them. They came back with a foam peanut made from cornstarch. They cost me 10 times the price of Styrofoam, but we did it because it was important to us to make the change. We recycle 70 percent of what comes through the front door. We’ve got a Dumpster that is strictly for cardboard, which we recycle 100 percent and get cash for.
How do you make sure that those choices are also sound business decisions?
Any time you’re going to make an investment in your company, whether it’s environmental or whatever, you’ve got to see that there’s going to be a payback. I would suggest they start with their people. You can have the greatest plan in the world, but it takes a lot of work to make it work.
It’s always about crawl, walk and run, but it’s got to be fun. It’s important that whatever you do, you explain the investment you’re making because people today, I honestly believe, want to join a brand, they don’t want to buy a brand. And they want to join people who are of the same mindset, good stewards of the Earth, good to their people, good to the environment.
Why are altruism and community involvement so important to you?
I grew up very, very poor. My father died when I was 4. Having gone through that kind of lifestyle, you learn a work ethic very early on.
I had a great mother with great values that raised us all to be good human beings. In growing up, that was a basic part of my life. As an example, we used to receive food from the Franciscan Sisters. In addition to that, our cousins used to pass down clothes to us. When you grow up in an environment like that, you have a little different philosophy.
Education has always been a cornerstone in the foundation of my success and passion. I worked my way through college; it took me 10 years because I did it in night school. I graduated from Miami University with a degree in business administration, with a major in marketing.
I worked my way through college as an electrician, so I had gone through an electrical apprenticeship program. I went to school, plus worked full time and overtime during the day. It was a tough journey but one I never regretted. I was very determined to get my degree.
I was the only one in my family to get a degree, so it was a milestone for me to achieve. So many people did so many things for us; now it’s time for us to do things for other people.
How do you track the results of your company’s charitable efforts?
We get close to 1,000 requests a year for baskets of our products for raffles. A couple of years ago, I thought we really needed to see what all this money is doing. So I created a form to make people accountable. On this form, we’re asking people to supply us with information about the charity, how much money it raised, who won the basket, just to make sure that we have accountability.
A piece of advice I give to my staff is you always have to inspect what you expect. If you don’t do it, you’re going to pay the consequences of not knowing.
It’s really amazing when you can measure and see the good that you can do. That makes you want to do more, but there’s nothing worse than feeling like you’re being used and taken advantage of.
How did you become an entrepreneur?
With my electrical background and my degree, I went to work for a large electrical manufacturer, Thomas & Betts Corp. I learned tremendous business skills from them. I worked my way up to new product development, did a lot of work with NASA.
I was giving seminars to architects and engineers about these new technologies, trying to get them to design them into their products. My former wife was a hairdresser. She wanted to open a salon. We bought a little salon and turned it into one of the premier salon spas in Cincinnati. That began my journey as an entrepreneur.
We started the company in 1983 as the distribution piece of the business. We had passive exercise equipment, active exercise equipment, tanning equipment, facial equipment and body wraps. Then the equipment became a commodity, and the math people squeezed the profit out of it.
I met a gentleman named Horst Rechelbacher, who was the founder of Aveda, while I was looking at new product lines. I liked the marketing approach that he took in that his products didn’t use detergents, which most such products do. By 1992, I had the rights to sell in Ohio, Indiana, Kentucky and Michigan. So we phased out the tanning and spa equipment and focused on the Aveda products.
I learned through the process that you’ve got to have some exclusivity because if two people are selling the same product, it becomes a commodity.
What are the critical elements for success in business?
The No. 1 asset that should be on the balance sheet is people. That’s where I’ve made the most significant investments in my business. One of my strengths is developing people, and I think most successful entrepreneurs are strong in that area.
I came across an article that told how many resumes are fictitious, how many people don’t have degrees that they claim to have. And it’s really tough getting a lot of this information because of the privacy laws. You hire someone and then you find out things about them in the field, whether they’re in sales or whatever.
So I don’t hire people; I let the staff hire people. I make a team do it independently, and they evaluate each candidate. What’s a resume? It’s just creative writing, in my opinion. An interview is nothing but creative talking. Who’s going to say anything bad about themselves? If the candidate comes in for an interview, you can find out in five minutes that it just isn’t going to work, but you go through the whole process anyway.
So I try to do career fairs instead. A career fair is really a storytelling. I think the greatest leaders of all time were great storytellers, and you’ve got to have a great story to tell what you’re all about, the good, the bad and the ugly.
So many companies paint such a blue sky, but so many times it turns gray or even black.
When you start empowering your people to take that responsibility, they love it and they want it because they don’t want someone coming in sitting next to them that isn’t going to do their job or get along with them. The kind of mindset of people that you attract is not just those looking for money. They’re here because we’re doing the right thing.
We have corporate memberships at a health club here. To me, it’s an investment in our people. If they feel better and they’re healthier, it’s going to help productivity and help with our medical insurance.
HOW TO REACH: www.fredrics.com
Education: Undergraduate, Boston College, 1979; MBA, Carnegie Mellon University, 1981
First job: Procter & Gamble, brand management
What has been your greatest business challenge?
Finding great people.
What has been your toughest business challenge?
Personnel decisions. [I try to handle them] fairly and with as many facts as possible. Sometimes you’ve just got to make tough decisions, and I really want to be fair, but I don’t shy away from them.
I believe in making them sooner verses later. Things that become tough don’t usually get better over time; they get worse over time if you just let them sit.
What has been your greatest business lesson?
It’s have a great product first. A great marketer on a lousy product isn’t going to go anywhere. Even a moderately successful sales driver on a great product will do really well.
I’m quite lucky that we have great people and a great product. We change people’s lives.
Whom do you admire most in business, and why?
Jack Welch. I admire him for his focus on winning, not just on playing the game.
Mercy Health Partners named Jeff Ashin interim president and CEO at Mercy Hospital Fairfield.
Ashin, who continues to serve in his position as executive director of The Heart Hospital at Mercy Fairfield, offers 30 years of diverse hospital administrative experience. He was previously CEO at several hospitals, including The Heart Hospital of New Mexico, Kindred Hospitals of Arizona, Mesa General Hospital and Beverly Hills Medical Center. He was also COO at St. Vincent's Hospital. In these positions, Ashin assumed responsibility for overseeing facility operations, strategic planning, financial and administrative management, business development and physician relations.
Ashin holds a master's degree in public administration and experience, ranging from critical care management to specialty hospital administration. His accomplishments include receiving the Winner's Circle CEO Award from OrNda Healthcare; managing the construction of the Worcester Medical Center, a 299-bed facility in Massachusetts; and becoming a certified trainer of DDI, a motivational and leadership development program.
Additionally, Ashin developed an Independent Physician Practice Association, a free-standing ambulatory surgery center; an ER-based industrial workers' compensation program; and a model cardiac surgical program. Ashin has been active in various community and health care organizations, serving on the government relations committee of the Arizona Hospital Association and American Red Cross Albuquerque chapter board of directors, and has worked with United Way and multiple chambers of commerce.
National City appointed Edward H. Sublett vice president of small business banking. In this position, Sublett is responsible for small business lending as well as development of branch personnel in the Cincinnati central market.
Previously, Sublett worked as a commercial real estate lender for Fifth Third Bank. Sublett earned a bachelor's degree from Xavier University. He is active in the Hyde Park and Walnut Hills communities, and serves as a member of the Purcell Marian High School board of trustees, as well as the Cavalier Alumni Association and the Cincinnati Real Estate Club.
Also at National City, Davis Griffin joined NatCity Investments as a managing director in its investment banking group. Griffin works as a senior banker, responsible for originating M&A advisory and capital-raising business. He has national industry responsibility for health care services and life sciences and regional responsibility for companies located in Southern Ohio, Kentucky, Tennessee and Missouri.
WonderGroup, a marketing agency focused on reaching kids, tweens and teens, expanded its staff with six new employees. Mark Wesling joined the company as chief financial officer, Dave Townsend as senior vice president, Jeff Jones as director of interactive media, Leslie Beil as account executive - promotions, Elaine Skeldon as account executive, Ried Cartwright as associate creative director and Sarah Burdell as assistant account executive.
Hixson Architects/Engineering/Interiors elected Helmut Kientz, R.A., and Chris Jarc shareholders. At Hixson, shareholders are the equivalent of partners at other firms. With the addition of Kientz and Meyer, the number of shareholders at the privately owned firm is 27.
"Helmut and Chris are outstanding associates at Hixson, and we are pleased they have joined the Hixson ownership," says J. Wickliffe Ach, CEO of Hixson.
Kientz is a senior architect, design and illustration, and has been with Hixson for more than 20 years. He is responsible for conceptual design, concept development and architectural illustration for the office, retail and GMP business units.
Kientz graduated from Ohio University with a bachelor's degree in architecture. He also earned an associates degree in architecture from the University of Cincinnati. Kientz is a member of the American Society of Architectural Illustrators.
Jarc is a project manager at Hixson. He is responsible for the development of project delivery strategies, coordination of all disciplines and facilitating effective communication, management and measurement on client projects.
Prior to joining Hixson, Jarc was a manager of engineering services at Ultramax Corp. He holds a bachelor's of science degree in mechanical engineering from The Ohio State University.
HOSPICE OF CINCINNATI
Hospice of Cincinnati named Brian Krause CFO. Krause comes to the hospice from TriHealth Corporate Finance, where he was manager of financial analysis and decision support. He holds a bachelor's degree in health administration and a master's degree in business administration from the University of Kentucky.
DYNUS TECHNOLOGIES INC.
Dynus Technologies, formerly CBS Technologies, named Jim Smith president. Smith joined the company a year ago as chief marketing officer. His experience includes stints in telecommunications and supply chain management, working for companies such as Reynolds & Reynolds, AT&T and Verizon.
When Mike Rorie laid the groundwork for GroundMasters Inc., he was burned out and bored with his first job in sales at an air cleaning company.
Self-employment appealed to the 19-year-old, who wanted freedom and flexibility. His grassroots start-up consisted of a single pickup truck and a slew of odd jobs, from mowing to raking leaves to plowing snow.
"It was my chance to be in charge and accountable for my own direction," says Rorie, president of GroundMasters. "I started mowing lawns individually."
The landscape is different now at GroundMasters' since Rorie reversed the "be your own boss" mentality that initially attracted him to the business. Rather than steering a one-truck start-up, Rorie drives a corporate caravan, a full-service commercial lawn maintenance and design/build firm with branches in Cincinnati, Florence, Louisville, Dayton, Columbus, Lebanon, Loveland, Springdale and, soon, Indianapolis.
GroundMaster's growth was inspired by Rorie's realization that he needed to get his company in order before he started short-changing his customers.
"In the service business, owners get inebriated with doing the work," says Rorie. "We immediately get caught up in the fact that we made a commitment, the customer wants it and we have to deliver it. You are consumed all the time."
This, Rorie says, is why many small businesses stay small, and he had much bigger ambitions. To achieve them, he needed a model he could manage and successfully expand so he could fabricate "clones" with identical systems, measures and service expectations.
"We've been busy," Rorie says, reflecting on the three branches GroundMasters has set up since 2003 -- steps toward a regionalization plan that he expects will double his company's revenue in five years.
Piecemeal projects fed GroundMasters' first days, but Rorie wasn't satisfied was that. Soon, corner lots multiplied into subdivisions, a business partner and, then, commercial work -- corporate campuses, home owners associations, retail properties and the like. Before long, Rorie had clocked 10 years as sales director, operations manager, administrative guru and front man.
Then, Rorie turned 30.
"Ten years went by, and we were working just as hard as when we started and nothing was getting easier by economy of scale," he says.
Rorie says this epiphany sparked assessment, planning and, ultimately, a set of systems that he reproduced in five regions. GroundMasters had customers and a solid reputation, quality services and market share, but he had not documented the operations process. That made it difficult for him to remove himself from the day-to-day work, because without his oversight, the business was not sustainable.
He knew he needed to figure out his goals, then work up an operations plan with the process needed to get there so employees understood how to get to the finish line.
"The biggest barrier for small business owners is understanding that rather than being personal and customized, you need systems, standards and a replicable [model] that your employees can understand," Rorie says. "Most people who start small businesses build them on their own backs and knowledge base, and they don't realize that if they spend that energy on developing systems and hiring competent employees, everyone is accountable and the model is growable."
The franchise industry does it best, Rorie says. Consider fast food, grocery stores or retail outlets. Quantities are measured. Products are predictable. Employees are trained, evaluated and promoted in a systematic way. A regional headquarters supplies franchises with marketing, products and other resources.
"The stores simply deliver the goods to an identified customer base," he says.
Owners in the trades adopt a different mindset, and Rorie says his method was no different than most.
"Information is controlled, not discussed," he says.
That's why Rorie says franchise companies are valuable training grounds for future business owners.
"You learn how a business works; you learn a system," he says. "Though you might not want to remain a manager there forever, you at least will understand the flow of business."
Business is personal for owner/operators, but when managers can share, delegate and invite their employees to participate in growing the business, significant expansion becomes possible.
"You don't grow a General Electric or a Procter & Gamble without having systems and competent employees," Rorie says.
When GroundMasters invited consultants and industry peers to help evaluate and rebuild its infrastructure, Rorie discovered that employees don't assume you want their loyalty and ideas until a manager tells them so. And until this conversation takes place, an owner will play on a one-man team no matter how big the employee roster.
"We had to share," he says. "We had to say, 'We would like you to do this.' And then, there was a separation again -- people who don't want to do that vs. those who want to do that."
Rorie retained the dedicated, strong players and invested in training them to execute on decisions so he could continue to work on the company's internal organs -- a process that took several years.
"What we know now that we didn't know then was, develop the answers to the test, set up training and then, you determine whether you have the right people and if you can hold them accountable," he says.
Though GroundMasters was a multimillion-dollar business, its core needed nurturing.
"The fact is, you don't have [your infrastructure] outlined because you are still trying to survive running your business day-to-day while you learn, develop and implement this new knowledge in a new way," Rorie says. "That is a feat."
Rorie envisioned a growth land-plan dotted with variations on his original theme. Branch operations would unlock market barriers and ensure GroundMasters maintained high-level customer service. In 1998, Rorie replicated his $4.5-million business model and set up a satellite office, a $500,000 branch in Northern Kentucky.
"Because this office was only 10 percent of our business, I could keep the 90 percent on track while we learned what it was like to separate and duplicate the second business," Rorie says.
Three months later, the company launched another service center in Dayton, covering markets 40 miles north and south of headquarters. Proximity to the headquarters is paramount when entering a new market, Rorie says, "because of the need to control, manage and have quick access at first. I had to be able to trouble-shoot and solve problems."
Market research is equally critical to the success of a satellite office. GroundMasters' typical client is a commercial customer in a high-end community, and nailing that down allows GroundMasters to tailor its marketing strategies and sell smart.
Most of all, branching out requires decentralizing the operation.
"When you own one business, you are centralized," Rorie says. "Everyone is in one place. When you replicate, you decentralize. Whether it's the copy machine or paper supplies, those items have to be replicated. Then you must ask, 'Do we need two copiers? Do we need another salesperson or another manager?'"
These questions roll into long-term plans. Can the branch wait before GroundMasters hires another manager, or is this a critical first step? Can administrative functions take place at headquarters, or will centralized invoicing, accounts receivable and even copy machines hamper operations? What does the business need now -- and what can wait?
"One of the biggest mistakes in building branches is lack of planning -- everyone is guilty of that," Rorie says. "And once you have a plan, you have to roll it out, implement it."
Without execution, strategies are simply words stuck on paper. Without measures, owners cannot benchmark to determine their success. And replicating without a recipe is not branching out but starting from scratch.
"How will you know when you need more people or equipment o r another mechanic or building without benchmarking?" Rorie says. "How do you know you need to put more proposals on the street to reach your sales goal? To duplicate the business, you must study how it operates and develop a package that you can implement."
Rorie learned this the hard way before he discovered the branch office revenue sweet spot -- $4 million. When a branch manager of a $6 million location repeatedly called headquarters for assistance, Rorie wondered why he didn't field concerns from his $3 million location.
He discovered that when revenue increases, so must manpower and resources.
"If you are too small, revenue is a concern; if you are too large, control is a factor," Rorie says. "Running a $3 million business is twice as easy as running a $6 million company. Four million dollars is the sweet spot because there is enough revenue to support the overhead structure you need -- buildings, people and resources -- and to cover those costs comfortably and still produce a solid bottom line."
Hamburger chain McDonald's figures its sales capacity this way, as do most franchises, Rorie points out.
"McDonald's says, 'Our stores will do X dollars per year,'" he says. "Once they hit that, statistically, they know the store is at capacity. Instead of expanding that location, McDonald's moves up the highway three exits and starts another restaurant and does another X dollars in revenue."
When Rorie considers his $4 million replication model and the markets GroundMasters serves, the numbers register more zeros -- exponential growth. Among the Columbus, Indianapolis, Dayton, Cincinnati and Louisville metropolises, he calculates revenue potential nearing $40 million, double today's books.
"It's simple once you decentralize your business," he says, returning to the importance of having systems to model building and revenue growth. "We know the answers to the test. Now, the company is infinitely replicable."
The consistency a companies that can carbon-copy its formulas keeps commercial clients. Professional audiences turn up their noses at half-baked performance, and property managers are more squeamish today.
"We work very hard now to build relationships that used to come easy 20 years ago," Rorie says. "The U.S. business world is much different. At its best, everyone wants faster, cheaper, better."
What's more, the decision-makers no longer carry budgets with wide, open space for landscape services. Today's point of contact is a woman with high standards who arranges service agreements during a formal meeting.
"You fight hard to get the audience, and it's very much a purchase/vendor relationship initially," Rorie says.
To meet the changing needs of the market, GroundMasters has remastered its sales approach and customer promise.
"We adjusted to meet different value systems," Rorie says. "It's harder to reach our customers because the environment is more formal; therefore, marketing has to be different."
Dressed-up clients want professional service providers, and most of them want the best price. Rorie chooses to cater to service-minded customers.
"Our best clients understand they are seeking a relationship from a professional they know is proven and competent, and they dial in their needs and negotiate the best price with those things in mind," he says.
As part of that service, when clients call, GroundMasters' account managers can respond immediately because service centers are no more than 15 miles away. That convenience sells well in a time-crunched corporate environment, Rorie says.
"Above all, customer service will save us, not quality, product or price," Rorie says. "We know people won't fire us over price or a mistake. They will fire us over poor service. When they want something, they want it, and they know we can deliver superior service to the markets we serve."
And while Rorie fills in regional gaps with the GroundMasters service model, internally, he watches the calendar for cash-flow leaks and caulks these holes with lucrative, add-on services. His business is no more seasonal than the garment industry or hotels and resorts, he figures.
"When you are in a seasonal business, your challenge is to fill in the blanks -- deseasonalize it," he says. "Look at winter coats. When do you sell them? When do you sell sandals and swimsuits? Clothing companies sell items all year long. You can't just be a swimsuit maker, you need a winter coat line, a spring line, sweaters and T-shirts."
Similarly, GroundMasters offers winter services such snow removal and early-spring products including flowers and mulch. Giving clients a reason to call GroundMasters year-round also solidifies relationships, Rorie says.
"[Commercial customers] won't replace us with a snow-only vendor or a competitor because they know we will give them priority status, we are competent and we can deliver the service," he says.
"You can continue to grow and expand if you have the passion and courage to do it -- and it takes both," he says. "You can say, 'I've done enough and I don't have that energy,' or, 'I don't want to take more chances,' or you can turn that around and say, 'This is fun. Why quit now?'"
How to reach: GroundMasters, www.groundmasters.com