Friedl Bohm believes people are allowed to make a mistake once.
"But if you make the same mistake three times over," he says, "you're an idiot."
Bohm, who for the past 13 years has been head of the world-renowned NBBJ architectural and design firm, claims his biggest mistake came when he was just starting out in the architecture field.
"When you're young, you're so eager to make things happen," he says. "You forget anybody has been there before.
"When you're 18, you always think your father is the dumbest person in the world. When you turn 30, your father is the wisest person in the world. Early on in my career, I didn't realize that. I was not listening enough to the voice of wisdom. I'm listening more these days."
And to a lot more people. The 58-year-old civic leader readily points to several in Central Ohio who have guided him along the slippery slope to success:
- George Skestos, founder of Homewood Corp.-- "The person who gave me my first architecture job."
- John Miller, the retired owner of JM Real Estate -- "He gave me my first planning job."
- The late Mel Schottenstein, who was a founder of the Schottenstein, Zox & Dunn law firm and co-founder of M/I Schottenstein Homes -- "He was always a great mentor and supporter."
- Frank Wobst, chairman of Huntington Bancshares Inc. -- One of Bohm's nominators for Junior Achievement's Central Ohio Hall of Fame and "one of the more fascinating individuals that I know," Bohm says. "He's always willing to help and advise."
- The late Art Cullman, professor emeritus of marketing at The Ohio State University and a frequent business adviser and investor -- "He was a guru of marketing at OSU and helped me in the community."
- Jack Kessler, chairman of The New Albany Co. -- "He's helped me businesswise and also as a friend."
In addition to this blue-chip collection of mentors, Bohm says he admires and learns from a number of other business leaders in corporate Columbus. These include John F. Wolfe, publisher and chairman of The Dispatch Printing Co., whom Bohm says he looks up to for his "laid-back stewardship" in the community; and Les Wexner, chairman of The Limited Inc. and Intimate Brands Inc., "for his incredible creativity and for his willingness to always be ahead of other people -- not just in his thinking, but in his commitments."
He also admires Dimon McFerson, retired chairman of Nationwide, "for what he's done for the city. He really stepped up and did a lot of things for the city he didn't have to do."
Even within the development field, Bohm has found role models like Jeff Keeler, chairman and CEO of The Fishel Co., whom he admires "because he built an incredible national business with very, very straight-forward values," and Bob White, chairman of The Daimler Group, "who created a very, very successful development group from nothing," Bohm says.
Bohm's willingness to learn from others has helped him transform the eight-member urban planning group he established roughly 30 years ago into a 900-employee, international architectural firm with projects in 20 countries and an annual construction volume of more than $3.5 billion. Notable projects in Central Ohio include Nationwide Arena, One Columbus, the Vern Riffe Center, Crowne Plaza, Three Nationwide Plaza and the Arthur G. James Cancer Hospital and Richard J. Solove Research Institute.
Although Wobst says in his nomination letter that Bohm "has concerned himself and his firm with helping to define the modern architectural character of downtown Columbus," Wobst also notes that "perhaps one of his most important roles has been as mentor. He is known to have helped many young entrepreneurs start their own new ventures."
These ventures include Transmap Corp., The Daimler Group and Travel Partners.
"Friedl always finds time to help friends who need his advice," says Ken Ackerman of The K.B. Ackerman Co., who also nominated Bohm for the Hall of Fame.
Nearly all of Bohm's other community involvements reflect a dedication to education, too. He has been a trustee and board chairman for The Wellington School in Upper Arlington, a board member at Muskingum College and currently serves as chairman of the Advisory Board of the School of Architecture at The Ohio State University.
"Education is something everybody needs and no one can take it away," says Bohm, a Fulbright Scholar who earned two master's degrees. "If you have an education, then everything else falls by the wayside."
Bohm also serves on the boards of Huntington National Bank and M/I Schottenstein Homes. In addition, he gives at least 7 percent of NBBJ's profits back to the community each year.
Bank One President David Lauer, yet another of Bohm's nominators, calls Bohm "a family man, a true professional and a giver to his community."
Bohm has also given of himself as a diplomat, serving on the Special Advisory Committee to the Austrian Chancellor, being named Honorary Counsul for Austria in 1993 and receiving the Grand Decoration of Honors in Silver for services to the Republic of Austria in 1995.
Bohm, the son of a Austrian politician, says his scariest moment came when he was just 4 years old and still living in a Soviet-occupied area of Austria. It was near the end of World War II and he and his brother were wandering the fields at a relative's farm.
"A British fighter plane started using my brother and I for target practice," Bohm recalls. "My brother pushed me down a hole."
He's convinced that's the only reason he lived through the attack.
Another close call came more recently, when Bohm, father of three grown children, learned that his son had walked through Pushkin Square in Russia this summer just minutes before a bomb exploded there, killing seven people and injuring at least 50 more.
Brushes with death like that, he says, "put everything in perspective."
"Family -- that's the most important thing," he says. "To me, that's the greatest accomplishment in life." How to reach: Friedl Bohm, chairman, NBBJ, firstname.lastname@example.org or 244-9907
Nancy Byron (email@example.com) is editor of SBN Columbus.
Friedl Bohm, chairman of NBBJ, spends every Christmas in the kitchen, cooking one of his favorite Viennese specialties, Weinerschnitzel, for his family. Occasionally, he'll do the same for friends visiting his ski lodge in Utah.
We can't adequately fund our public schools, yet the legislature somehow managed to scrape up nearly $8 million in state funds last year to underwrite the 2003 Ohio bicentennial celebrations.
Sounds like a frat-house mentality to me: Ignore the peeling paint on the porch and the broken water heater; we have a party to plan.
I don't mean to be unpatriotic, but this is a blatant misuse of taxpayer money.
Government funds shouldn't be paying for hand-cast, commemorative bronze bells or statewide barn-painting projects. These may make for good photo ops for incumbent politicians, but they do nothing to improve the lives of Ohio's citizens. Government funds should be spent trying to ensure all Ohioans have enough to eat, that they get an adequate education and that they feel safe in their homes and communities.
We have a long way to go in meeting such basic needs. For example, more than 1.2 million people in Ohio are hungry or at risk of hunger every day, according to the U.S. Department of Agriculture. More than 117,000 people in Franklin County alone live in poverty, according to a study by the Ohio Hunger Task Force.
An estimated 120,000 adults in Franklin County --roughly 16 percent of the adult population -- lack basic literacy skills such as being able to process simple texts, tables, charts and maps, according to a National Adult Literacy Survey. More than 90,000 new reports of child abuse, neglect and mistreatment are made in Ohio each year.
How can we party at a time like this?
Last fall, Gov. Bob Taft announced $6 million in emergency shelter grants would be given to Ohio communities and nonprofits to assist the homeless. That's a nice gesture, but it's still almost $2 million less than he's earmarking for Ohio's big bicentennial festivities. And it's a full $24 million less than he originally wanted to spend on celebrating the state's 200th birthday.
That's right, folks. Taft originally recommended $30 million in state funds be set aside for the bicentennial.
I understand the desire to acknowledge this milestone "birthday," but underwriting festivals throughout the state and Ohio-shaped corporate limit markers are unnecessary expenses at a time like this. After all, when a state has had 200 years to figure out how to house its homeless, feed its hungry and protect its youth, but those problems are still widespread, there's not much cause for celebration. Nancy Byron (firstname.lastname@example.org) is editor of SBN Magazine in Columbus.
Catering to top talent without spoiling them can be a delicate balance.
Radio executives at 610-WTVN thought they'd reached the ideal this past winter when, instead of letting ratings suffer when No. 1-ranked morning host Bob Conners took his annual hiatus to Florida, they agreed to let him broadcast from the Sunshine State instead.
"He is an important part of this radio station," says Steve Konrad, program director for WTVN. "And last winter he took, I don't know, a couple chunks of vacation in a three-month span, and the conventional thought was, 'Wow. We kind of stutter-stepped during the morning, and it took us a couple of (rating) books to get back up.' It wasn't that he completely fell off the map because he wanted to take vacation time, but when you have such a popular, trusted person like Bob ... it's a trade-off.
"Do we have him away? Or can we work out an arrangement that he's happy with and we're happy with?"
They opted to try the latter.
A key condition of the arrangement was that it be seamless. They didn't want listeners to know their beloved BC was out of town.
"I kind of see it as irrelevant," Konrad says of the decision to not inform listeners that Conners was working from Florida. "I don't see it as covering up. But there's no benefit in making noise about it. We're still providing the high-quality sort of things people have come to expect from Bob. So what difference does it make?"
Keeping Conners in the loop on local issues and events was fairly easy despite his geographical separation from Columbus, Konrad says.
"Part of that is a testament to Bob, that he knows so many people and is in touch so much," Konrad adds. "He calls a lot. But he's doing that even when he's in town."
WTVN's little secret stayed under wraps fairly well throughout the winter. Conners even participated in weekly on-air weigh-ins as part of a friendly weight-loss wager between his producer Mike Elliott and executive producer Joel Riley. Listening to the lighthearted, spontaneous banter between the three, you'd never suspect Conners wasn't simply waiting in line with the others to step on the scales.
WTVN afternoon host John Corby says he understands why execs permitted Conners to do his show from Florida, but notes it's clearly a perk Conners was afforded because of his stature at the station.
"I'm sure if I asked if I could do my show from Florida all winter, they'd say, 'No,'" Corby chuckles. "But that doesn't bother me. He's been here for 30-some years and he's still doing well. I say, keep the guy happy."
Conners, who is scheduled to be back in Columbus April 1, was extremely tight-lipped when asked about his Florida arrangement, referring all direct questions to General Manager Tom Thon.
When pressed on whether he's being given special treatment by station execs, however, Conners says, "I don't think I get anything anybody else doesn't get. I don't have any idea what other arrangements they make with anybody else; I'm satisfied with what I have."
Conners points out that many radio personalities broadcast on WTVN are not locally based.
"Rush Limbaugh is in New York. Dr. Laura (Schlessinger) is in L.A. Art Bell is in Nevada. Tina Gregory is in Washington," Conners says. "I talk to guys at ESPN magazine sometimes and some of them are in Miami and some of them are in New York. The content is the key. What comes out of the little box is the key."
One big difference, Konrad points out, is a nationally syndicated program like Rush Limbaugh -- who does his show from Florida for six months of the year, Konrad says -- doesn't need a local feel. Listeners don't expect it.
So will WTVN try the arrangement again next winter? Konrad's personal vote would be no.
"As much as I'm trying to make you think it's business as usual, it's a higher level of activity that's required to do this," he admits. "I'm against it from a standpoint that there's something about being in the radio station and jaw-jackin' with your co-workers and bouncing stuff around that's hard to replicate over multiple phone calls. Being in the station and making faces at your producer when a guest is boring ... things like that.
"So I'm not really wild about it. But I think everybody is in agreement that it's good to keep BC on the station more." Nancy Byron (email@example.com) is editor of SBN Magazine in Columbus.
Filing personal bankruptcy isn't the big, embarrassing deal it used to be.
It's a fairly routine, seemingly acceptable way of getting out of financial trouble these days. It's not really a black mark on your credit history. It's more like a blemish -- it can be overlooked.
You can start fresh. You can walk away from your debts. More than a million people opted to do just that last year -- and in 1999 and 1998. Something is seriously wrong with that.
It's a troubling pattern that's caused Congress to rethink how bankruptcies should be handled. One solution passed by both the U.S. House and Senate earlier this year would require individuals of above-average financial means who file bankruptcy to set up a repayment plan for their debts instead of walking away scot-free.
After all, what do people learn from a system that doesn't insist on repayment -- even in small installments on an extremely drawn-out schedule? We're teaching these people it's OK to be reckless; that money isn't valuable. That others will clean up the mess they leave behind. What kind of lesson is that?
My husband once had a roommate who declared bankruptcy at the tender age of 22. To see how he lived, you'd never know it. He still had an ATM card which he used to excess, overdrawing his bank account on more than one occasion. He still took his girlfriend to the movies and even on weekend trips to Atlantic City, where he'd blow $900 playing the slot machines and think nothing of it.
He ate out more than he ate in. He still bought CDs and videos and beer. He lived like, if not better than, any other 22-year-old. In fact, he wasn't the least bit ashamed by the bankruptcy filing. He talked about it freely and even bragged about how his apartment was rent-controlled because of it. He thought he had some sweet deal.
Clearly the system needs a radical change if it's encouraging mindsets like this.
If the Bankruptcy Reform Act is executed correctly and individual repayment plans are enforced, it will teach consumers a memorable and valuable lesson in financial responsibility. They'll have to set budgets and live by them every day. They'll learn you have to take responsibility for your spending: If you live beyond your means, it will catch up with you. They'll learn what it means to be held accountable.
After all, not paying a debt is akin to stealing. There should be repercussions. And they should hurt. You should have to go without luxuries for awhile. You should have to sell your CD player, your television set, your VCR, your golf clubs, your art collection and your jewelry to repay what you owe.
You should have to give up the lease on your 2001 Land Rover and drive a used Honda instead. Anything less is just plain wrong.
Some say this new legislation will hurt consumers. Hogwash. I say it will help them -- by making them realize they have to accept responsibility for their actions. If we can't teach people how to set a budget and stick to it, we relegate ourselves to standing idly by as they run into the same credit problems again and again.
Bankruptcy should be a last resort for those in financial trouble. It should be reserved for the most extreme cases. By getting tough on bankruptcy filers now, perhaps we can raise a more financially aware generation of consumers to follow. Nancy Byron (firstname.lastname@example.org) is editor of SBN Magazine in Columbus.
As you read this, I'll likely be at the park with my kids -- or listening to story time at the library or explaining why it's not nice to squish that bug in the sandbox.
I'm apt to be doing these things a lot more often, in fact. And not because I've accrued a backlog of vacation time. I'm taking a leave of absence from SBN to spend more time doing what I enjoy -- and feel like I'm missing out on -- the most: raising my two young children.
I've been trying to strike the right balance between family and career for nearly three years now without letting either aspect of my life suffer. I ended up being the one caught in the middle.
Work demands and family demands often overlapped. When I was at the office, I felt guilty for leaving my kids at home with a sitter. When I was at home with my children, I exhausted myself working at night to finish writing and editing stories I couldn't find time to tackle during the chaos of the day. That's why taking a leave of absence seems like the right thing to do.
That doesn't mean you've seen the last of me or my work, however. My byline will still appear occasionally in the pages of SBN. I may also be doing some work behind the scenes for our Web business, SBN Online, in the months to come.
I've made many friends in the business community in the past seven years and I'll miss the regular contact with them. Yet I'm comfortable in my decision to take a step back because I know my long-time friend and fellow editor, Joan Slattery Wall, is well-liked and well-respected in this community and will continue to foster those relationships in my absence.
Joan has been promoted to Senior Editor of SBN Magazine effective this issue.
I'm uncertain how long my leave of absence will last. I am certain, however, that SBN Magazine will continue to fulfill our readers' needs for finding the smartest management strategies in today's business world. I, in the meantime, will be trying to find the smartest way to teach my children about life.
I think my job just got a whole lot bigger. Nancy Byron (email@example.com) is editor of SBN Magazine in Columbus.
Mike Brooks was between a rock and a hard place. Or so it seemed at first. The chairman and CEO of Rocky Brands Inc. knew his biggest retail customer wasn’t playing fair. The customer was selling Rocky merchandise below target prices and duplicating hot-selling Rocky products overseas under its own name. Yet, the customer accounted for more than 10 percent of Rocky’s total sales. “They were powerful,” Brooks says. “They were driving the business, and they could sell tons of stuff. But they were really a pain, because you could never trust anything they said. It was not a pleasant relationship.” One potentially fateful day in 1992, Brooks decided he’d been pushed around enough.
“I just got tired of all the games they were playing,” he says. “I went out, by myself with a salesman, and I sat down with the president and the buyer and said, ‘We’re no longer going to do business with you.’ I was young and foolish then, but that’s what I told him: ‘I’ll complete all orders that we have at the price you were quoted, but I have no trust in you, so I’m not going to do business with you anymore.’ The buyer and owner looked me in the eye and said, ‘Are you sure you want to do that?’ and I said, ‘Yup.’ I was a little apprehensive. What happens if my sales just go south? But I’d tried everything. It was my personal decision.”
It was also a huge gamble. Not only because Rocky was certain to lose a big chunk of its sales as a direct result of that conversation, but because the company was in the midst of preparing for its initial public offering at the time.
“That was my largest single customer, and I didn’t tell the public that I was going to divorce my largest single customer,” Brooks says. “But I just felt it was the right thing to do, and I didn’t know the public game very well at that time.”
Fortunately, the story has a happy ending.
“Our volume went to nothing in about six months, but we sold that up elsewhere and didn’t miss a beat,” Brooks says. “And I didn’t hurt myself in the public eye, I don’t believe.”
Rocky went public under its previous Rocky Shoes & Boots name in February 1993 without a hitch, selling shares at its original asking price of $10 each on the NASDAQ for a net of roughly $15 million.
Clearly, Brooks won’t let maverick or high-maintenance customers push him around. Here’s how he has built, rebuilt and maintained strong relationships — and a $275 million company — without compromising his principles.
Rebuild relationships carefully
Brooks takes honesty very seriously. It’s a cornerstone, upon which he — and his father before him, as well as his grandfather before him — built the Nelsonville-based footwear and apparel business.
When he bid adieu to his largest customer in 1992, he didn’t permanently write it off as a bad apple. People can change, after all. Therefore, companies can change, too.
As it turned out, that customer wanted a second chance.
“They stayed in touch with us and continued to kind of court us,” Brooks says. “[They’d call and ask,] ‘Hey, when can we come back? We still like your product, and we could sell a lot of your product,’” he says. “But we stayed away from them for about two and a half years.”
Finally, Brooks acquiesced.
“I said, ‘OK. Let’s try it again, but we’ve got to follow some rules,’” he says. “What’s interesting is they started buying the shoes again and became our No. 1 customer again within 12 months. That taught me a lesson that sometimes you’ve got to have tough love with a customer. Sometimes you can go back and rekindle that relationship.”
But it takes time. And the agreement to play fair requires continuous monitoring.
“They still play some of those games,” Brooks says. “They’re not a customer I enjoy calling on or have fun with or really look at like a partner.”
But the relationship remains intact and lessons have been learned. The jump in Rocky’s sales was a nice byproduct, too.
“It was amazing to see how it skyrocketed from nothing to millions of dollars annually just like that,” Brooks says, snapping his fingers. “They’re powerful.”
Make intelligent compromises
Brooks believes in partnerships. He wants to help all his customers be successful. After all, if he can give customers like Bass Pro Shops, Dick’s Sporting Goods and Wal-Mart what they want, he should get what he wants — higher sales, more and better shelf space, a better market position — in return.
Walking that fine line between supplier and friend can be tricky.
“Sometimes customers ask us to support them and help take inventory back,” he says. “We never want to do that. But sometimes we will. If exceptions have to be made, they will be made, but that doesn’t mean it’s carte blanche, that anytime you’ve got an inventory problem we’re there to relieve that for you.”
That’s when you can make creativity come in to play.
“We’ll do other things,” he says. “We’ll run a promotion. We’ll do a trunk show.”
In rare circumstances, Brooks might even partner with a customer to offer an exclusive product line, but even that has to have some preset limitations.
“We’ll give a one-season or one-year exclusivity,” he says. “Not for any longer than that.”
Allowing a product to remain exclusive to one customer for too long would risk upsetting other Rocky Brand customers and possibly compromise the product’s true sales potential. Brooks has been fire-tested on this policy, too.
In 2002, executives at Dick’s Sporting Goods agreed to be the sole seller of Rocky Brands’ new line of hunting apparel.
“We gave them a test on Rocky Brands for one season, and it was extremely successful,” Brooks says. “They sold the stuff out like it was free.”
But when the season drew to an end, executives at Dick’s weren’t ready to let go of the exclusivity.
“They had so much success, they said, ‘Wow. Let’s do a five-year contract,’” Brooks says.
But that wasn’t their original deal.
“We were at a crossroads,” Brooks says. “We could’ve let them license it, and they probably could’ve sold, maybe $25 million worth of stuff, and I could’ve gotten a nice licensing fee. But I wasn’t going to have as much control over the quality and the pricing and the innovation. They were all about selling a lot of stuff. I just wasn’t comfortable going down that road.
“So, begrudgingly, I said to one of my good customers, ‘Thanks for the test, but we’re not going to give you the exclusive right to this brand of apparel for a licensing deal. We’re going to do it ourselves.’ So I elected again to upset another good customer for a couple seasons.”
Dick’s didn’t take the refusal lightly.
“They didn’t buy from us for a few years,” Brooks says. “They were very, very upset over that. It took two or three years to get them back involved. But they’ve come back, and they’re a big customer today.”
Create face time for
Brooks appreciates slow-and-steady, old-school selling techniques. He knows the key to winning, retaining and, in some cases, regaining customers is ongoing, open communication. But that takes time.
“It’s finding the time to speak with your sizeable customers or new customers you want to bring on board,” he says. “Find the time to really listen to their concerns and opportunities. It’s just old-fashioned communication. There’s not any magic or secrets there.”
Yet in an age dominated by convenient, immediate electronic communication, finding time to physically visit customers has become increasingly difficult — but more important than ever.
“Have face-to-face time,” Brooks says. “Have dinners together. If you can, recreate together.
“One of the greatest things we ever did here when we were a smaller company was annually we would do a raft trip down to the New River Gorge in West Virginia,” he says. “We would invite anyone who assisted us in having a successful year. It could be a banker, a customer, a lawyer, a supplier. We’d bring them into Nelsonville and have a cookout at my house or my brother’s house and walk them through the business and show them what we’d done that year and then we’d get in the bus and go down to West Virginia. We’d spend the night and whitewater on the New River. I may have a retailer in the boat and a leather supplier in the boat and the mayor of Nelsonville in the boat. So you’d really get to know people and build trust. Many people help build your successes. So I remember that as a really good building stone for our business.”
Today, such outings are done almost exclusively with Rocky’s largest customers — but they’re still an integral part of building and maintaining those relationships.
“We’ve got a half-dozen or a dozen key account executives who have to reach out and do some things with their special customers,” Brooks says.
“If a salesman has not visited a customer annually, it’s a problem,” he says. “It’s a big problem. We have a lot of customers. In our Georgia [Boot] division alone, we have 15,000 customers. So if they’re a small customer, we may only see them once a year. If they’re a big customer, we’re going to see them every 30 days. We want to be there, listening to their concerns and working closely with them.
“It’s my belief that you have to have quality face time and be honest,” Brooks says. “Don’t tell them something you can’t deliver on. Don’t try to overinventory them. Be their partner.
“At the end of the day, it’s all about us working together to solve problems and make money. We both have to make money. It’s pretty simple, really.”
HOW TO REACH: Rocky Brands Inc., (740) 753-9100 or www.rockybrands.com
Jim Ziminski felt disaster looming. He saw it in the company’s revenue growth, which was nearly flat. He saw it in the declining sales in his business’s most important distribution channel. He knew Crane Performance Siding LLC was losing market share. And he knew homeowners were becoming disenchanted with vinyl siding, which was practically the only product offered by his company since its founding in 1977.
“Vinyl siding had somewhat of a bad reputation,” says Ziminski, who was promoted to president of Crane Performance Siding in late 2002 to help turn around the struggling, family-owned company. “They didn’t think it looked real.”
It was a hard truth to face, but Ziminski, who previously served as vice president of sales and marketing for this division of Crane Plastics Co., knew fighting it wouldn’t help. His company had to find a new niche and fast.
“We started looking at our brand and our products and our offerings, and what we realized was for us to position ourselves as the best vinyl siding company with the best service, lowest cost, best value was not a realistic proposition,” Ziminski says. “We were kind of late in the game. Even though we’d been in vinyl a long time, we hadn’t kept up with the Joneses. What we did realize was we needed to focus.”
That focus came in the form of a new, higher-end siding product that appeared promising, but would require sweeping and immediate changes at the company, which employs more than 300 people.
It would require an almost complete turnover of Crane’s sales team. It would require a drastic reconfiguration of its factory. It would require new customer service systems and different distribution methods. But, if it worked, the payoff would be sweet. Ziminski figured he had little to lose.
“We were in a tough position at that time,” he says. “But when everybody panics and runs around, somebody stays calm, somebody stays focused and somebody takes [market] share because they had a plan, and they stuck with it.”
Ziminski’s plan was solid-core siding, a sturdier, more attractive alternative to vinyl siding, which his company began making and marketing as CraneBoard.
“We ultimately focused on that, and it absolutely rebuilt our company,” he says. “It helped us get customers. It helped us retain customers that were, perhaps, going to leave. It helped our customers get new customers because now they had a unique product.”
In Crane’s first year selling CraneBoard, revenue grew more than 20 percent, Ziminski says. Since then, sales have jumped at least 50 percent more.
“We’re between $150 and $200 million with plans to grow beyond that, even though the market is contracting,” Ziminski says.
Here’s how Ziminski’s bold decision turned around Crane Performance Siding and how Crane’s renewed success has positioned the company to remake itself into a completely new entity: Exterior Portfolio by Crane.
Hearing the critics
When Ziminski began assessing Crane’s market position in 2000, he didn’t like what he saw. So he went to the primary source of his company’s lackluster sales: homeowners.
“We did a lot of focus groups with consumers,” Ziminski says. “Those can be pretty eye-opening. Sometimes you’re hearing things you’re not so comfortable with, but you’re hearing things you need to hear.
“What we heard about vinyl siding was that people didn’t like the fact that it was shiny or glossy. They didn’t like the seams. They liked how competitive products like cedar and fiber cement were straighter and wider. ... They absolutely wanted maintenance free, but they wouldn’t give up good looks to get maintenance free in many cases. What they really aspired for was a better, high-end product.”
That gave Ziminski hope. Not only was there still room for Crane to carve out a slice of the marketplace, but there was a whole new pie to be had.
“People in tough times, they see problems, they see challenges. We saw opportunities,” he says. “When we went out and talked to our dealers and distributors and contractors and builders and, most importantly, homeowners, we had no doubt they wanted this product. There was a need for something different.
“The thought was if we don’t do this, a competitor will. So who better to cannibalize your own product than yourself?”
Get on board or get out
Ziminski wasted no time getting CraneBoard ready to launch. The first task was convincing employees this was the best perhaps only way to a stable future.
“The first people we sold this product to (were) our people,” Ziminski says. “We were open and honest and said, ‘We can’t be the best at vinyl siding. It’s too little, too late. But the market is telling us that we’re really onto something here [with CraneBoard], and we can be the best in this category, which is a higher-end category.’ We essentially sold them on why we were doing this and why it made sense.”
Getting buy-in from every member of the sales force was particularly vital if this turnaround plan was going to work. So before Ziminski even called the first sales meeting, he sent everyone the book, “Who Moved My Cheese?” by Spencer Johnson, a best-seller about dealing with unexpected change.
“I told them, ‘Your cheese is going to get moved,’” Ziminski says. “‘And it’s going to get moved rapidly, and you really have one of two choices. One path is you’re going to embrace this change and be motivated by this change, and you’re going to enjoy it ... or you can fight it. And if you fight it, I would suggest that you probably want to leave now because we’re going to change with or without you.’”
In the end, a whopping 70 percent of the sales force either headed out or was shown the exit. The remaining 30 percent got down to business.
“Our model was to sell the higher end, to sell the uniqueness, sell the different things,” Ziminski says. “We ended up with a very high-functioning sales group very quickly, and we have not had turnover of those people. That was the first major makeover.”
The next was manufacturing. “When it came time to rework our factory and get new equipment, the question was always, ‘Is this what’s best for solid-core siding, which is our future, or is this best for vinyl siding?’” Ziminski says. “Each department, be it manufacturing or customer service or distribution, they all understood what the vision was for the company: This is what we are; this is what we’re not. And it all fell into place and became pretty clear.
“Quickly thereafter, the results began to turn. Once we had the results, people really began to believe.”
By the end of 2006, Crane had introduced six new solid-core siding panels that were wider, straighter and less glossy than vinyl and 12 decorative trims and corners just about everything homeowners had said they wanted in a maintenance-free siding product.
Sales of these new offerings were leaving Crane’s traditional vinyl siding in the dust.
“If you look at our sales mix, where it was heavily weighted to our lowest-cost products in 2000 and 2001, it is equally heavily weighted to our solid-core products now,” Ziminski says.
In addition, sales-per-employee figures are up roughly 40 to 50 percent, and the company’s throughputs, scrap rates and on-time delivery have improved significantly since focusing on solid-core.
“Our profitability results increased dramatically,” he says. It’s a turnaround that essentially saved the company. “I would question whether we would have been able to sustain [ourselves] over the last seven years if we just kept doing vinyl siding,” Ziminski says. “That’s not because vinyl’s bad. It’s because we weren’t going to be able to compete and change with the dynamics of the marketplace the way (other manufacturers) were. If we were here and that’s a huge if we would be very, very different-looking.”
Ziminski says his turnaround strategy starts by being honest with employees.
“You need to tell them what’s going on and be fair,” Ziminski says. “Sometimes it’s scary. When the market is shrinking, no one wants to hear that, but they need to.”
Hearing criticism is also difficult for CEOs. But it’s essential if you want to grow.
“I think the difference between us and our competitors is we heard what our customers said, and a lot of people hear what they want to hear,” Ziminski says. “We wanted to hear they loved vinyl siding and everything was great. We didn’t hear that. We heard what their issues were with the product, and we knew solid-core could solve some of their concerns. We didn’t try to fight it. We didn’t argue with them. We went to what they wanted.”
More change ahead
The next big change for Crane Performance Siding will be just as monumental as the last and it’s already well under way.
“There are dynamics in the market that we can’t ignore, so we’re repositioning ourselves once again,” Ziminski says. “We’re focusing our company on exterior design. People are using a mix of materials, colors and textures on the exterior of their homes now to get a more unique look.”
Ziminski is capitalizing on that trend by transitioning his company into a completely new one.
“We’re going to essentially become a new company called Exterior Portfolio by Crane,” Ziminski says, noting that Crane Performance Siding will remain in business, but will sell only vinyl siding products. All exterior design elements, including BellaStone a new, realistic-looking stone product introduced this spring by Crane as well as the company’s wider, more decorative trims, will be shifted to the new company.
Delineating the product lines in this way is important for the future success of both businesses, Ziminski says.
“If you’re going to buy BellaStone, a very expensive, high-end product, for example, do you want to buy that from a vinyl siding company? I’m not so sure. It’s a different image,” he says. “We’ve, again, talked to our customers and talked to the consumers and gotten great confirmation on the path we’re going.”
Ziminski will spend much of the remainder of 2007 positioning Crane internally and externally for the changeover to Exterior Portfolio by Crane. He’ll get some help from Duo Dickinson, a nationally known architect and contributing editor in home design for Money Magazine, who has been hired to help with Crane’s repositioning and marketing of its new exterior design products.
“You have one chance to make a first impression; just one,” Ziminski says. “When we come out with this stone product, we have just one chance for someone to try it the first time, so we better make sure we have it right.”
Naturally, Ziminski will also continue to seek input from consumers on how to improve upon his company’s new offerings.
“We’re a big believer in launch and learn,” Ziminski says. “We want to hear they love it, but we also want to hear what they don’t like, what’s not right and what could be better. We believe in 100 percent brutal honesty.”
By the start of 2008, Ziminski expects to make the full transition to Exterior Portfolio by Crane.
“I think [employees] know and accept that we’ve got to keep changing,” Ziminski says. “The only thing we can count on is we’ve got to continually evolve because the market is not static.
“We can see what we’ve done in the past, and we are proud of it. But what we’re going to do in the future is even bigger. We owe it to our employees and to the Crane family and to the corporation to reach our full potential. Our full potential is far greater than what we’re doing today.”
Education: Ohio University, degree in business education
First job: Sales training for Peabody Coal Co.
Greatest business challenge:
My first year back [at Columbus Serum], our largest supplier which represented 20 percent of our business decided to go direct instead of through distributors. That was really tough.
I knew coming back into it that we were at the mercy of the manufacturers, and to lose 20 percent of your business within your first year, how were you going to make that up? We really didn’t have products that could make that up, so we had to go out and grow the other lines. That was a real challenge. But we were able to do that. When I was able to deal with losing 20 percent of my business and survive, I felt pretty good about it.
Most important business lesson:
You need to be consistent in making decisions for the company ... and how you run the company. And you need to make sure that you do a good evaluation before you make decisions for the company.
Peterson on his son, Craig, being next in line for the president’s spot:
Craig basically grew up in the business. He started working in the warehouse when he was in high school. He was making deliveries to veterinarians during college, and he’s now vice president of the company.
He’s done almost everything you can do at the company: warehouse, inside sales, truck driver, outside sales, purchasing. He’s been working here since about 1986. We have brought Craig up through the business, and he’s involved in a lot of the decision-making that goes on now. Bruce (Bob Peterson’s brother) and I selected him to come in [as the heir apparent] about two years ago.
The blunt query, asked by a front-line employee, made Dave Bianconi think. Then it made him act. The results were dramatic: Bianconi’s company no longer hires smokers.
“We have enough things to manage and worry about without managing people’s addictions,” says Bianconi, president and CEO of Progressive Medical Inc. “I really thought this was more of a distraction that we probably, hopefully, shouldn’t have to deal with. So I asked the HR department, ‘What would you say if I said I didn’t want to hire smokers anymore?’ The first answer was that they thought it would be discriminatory. I said, ‘Prove it to me.’”
Long story short, they couldn’t.
It may have been a gutsy move on Bianconi’s part, but the 53-year-old entrepreneur has never been one to sidestep a problem. Perhaps that is why his company has grown so dramatically and consistently through the years.
Progressive Medical is among the fastest-growing, privately held companies in Central Ohio, expanding an average of 43 percent during each of the past five years. And for the past seven years, it has been named to the Inc. 500, a list of the fastest-growing privately held companies in the country.
In 2005, Progressive Medical recorded $140 million in sales. This year, the Westerville-based company is on pace to surpass $170 million.
“It could be over $200 million, depending on if certain business opportunities materialize,” Bianconi says.
Here’s how Bianconi has conquered some of his biggest challenges as he’s guided Progressive Medical to new levels of sales and success.
Watch cash flow carefully
“Cash is king,” Bianconi says. “With cash, many things are possible. Without cash, few things are possible.”
Bianconi knows of what he speaks.
“We’ve had situations here in the past where there may have been a communication breakdown or an electronic breakdown or a billing breakdown,” which led to a cash flow problem, he says. “As with many things in life, the relationships you have with your customer is vital in that.”
Progressive’s first big cash crunch hit around 1999, when the company was growing at a breakneck pace.
“Our largest customer had a breakdown of its internal processes,” Bianconi says. “It took longer than normal for us to connect the dots because we thought they would fix the problem long before they did.”
When the majority of the roughly $1.5 million owed to Progressive was 60 days overdue, “We really started to wake up,” he says.
It was time to take action.
“We all make plans based on what we are expecting to receive from people who owe us money,” Bianconi says, so he decided to leverage his relationship with the customer to see how or if he could help fix the problem.
“In the area of owing businesses money, it is critical that you allow them to become part of the solution and not simply remain part of the problem,” Bianconi says. “People want to know exactly what you’re going to do for them. It may not be what they want to hear, but it’s critical that you tell them what you’re going to do and that you actually do it.”
In the end, Bianconi got the company to bypass its normal protocols and cut Progressive a check to cover most of the past-due amount.
“Most people who owe other companies money typically do one of two things: They fail to communicate at all with those companies, or they miscommunicate with those companies,” he says. “And when they miscommunicate, they tell them things that aren’t accurate or aren’t true or know they can’t fulfill.
“In the times that we’ve been cash-poor, we’ve communicated with the people who are important in our business relationships. We have not told them that we’re sending them $100 if all we can do is send them $20. If everyone is dealing in reality and not fantasy, it makes everyone’s life a lot simpler and easier to manage.”
To help avoid cash flow problems at Progressive, which relies on payments from the notoriously red-tape-laden health insurance industry, Bianconi has set up a system to help ensure bills are channeled to the right people for payment.
“We recognize, No. 1, who it is that is actually paying us,” he says. “We provide services to an injured worker and we may get the request from a rehab nurse, but it may be a totally different entity that’s going to pay us. So we have to pay attention to that when we receive the order not after we’ve provided the service.
“The other thing that we really looked at in our business model was we contracted and negotiated with providers that they allow us the time to collect money, basically on their behalf, so we can turn around and pay them for services rendered.”
In addition, Bianconi has learned to keep careful watch over company expenses.
“Managing your overhead is critical,” he says. “You must try to eliminate costs that you will be forced to keep regardless of what direction your business ends up going in. Examples of that are computers, office furniture and equipment, and leases that people get themselves into that you cannot just wish away. Once you sign a lease, if it’s a three-year lease, you are tied to those payments for three years.”
Much of what Bianconi learned about managing cash flow came from another company he worked for before starting at Progressive Medical in 1986.
“This other company was in dire straits from Day One,” he says. “While I was there, I had an opportunity to learn what not to do in many cases. But I also learned how people will work with you in the darkest of situations if you are forthright and honest with them.”
Keep it personal
Another challenge Bianconi has conquered along the path to success is maintaining good internal communication as the size of his work force has swelled. His mantra: Keep it frequent and face-to-face, and go easy on the e-mail.
“Some of the things that have allowed businesses to become more successful have also been their Achilles’ heel,” Bianconi says. “E-mail, for example, allows us to communicate information faster than we’ve ever been able to communicate in the past, but there is a price for that. When you speak with someone behind closed doors, the conversation is only heard by the two parties involved, and there is little chance for things to be taken out of context. E-mails, on the other hand, have a tendency to be the genesis of the corporate gossip column. People copy them along without regard to the fact that the content may have been meant for the original recipient’s eyes only.
“The best way to communicate with someone and share information is to allow them to receive it first-hand.”
That’s also why Bianconi is careful to include all levels of management in as many face-to-face meetings as possible.
“You have to communicate the information to these people anyway,” Bianconi says. “So you can either do it very efficiently by having them included in the meeting, or you can count on someone to translate what was said in the meeting, and it may not be as accurate.
“In addition, inclusion in meetings seems to be the knighthood to importance. People often ascertain their value to the company by whether or not they are invited to attend meetings.”
In a similar team- and esteem-building vein, Bianconi encourages all his direct reports to be visible and accessible to workers at all levels.
“I, for instance, every several weeks, I will take six or eight employees bottom-line employees to lunch,” Bianconi says. “It’s an opportunity to ask questions and to provide answers. It is amazing the situations and the information that gets communicated both ways.”
It was following one such lunch that Bianconi had his epiphany about employees who smoke. During another lunch, he discovered the gratitude a couple of ice machines could yield from employees.
“We had about 200 employees, and we only had two ice cube trays in the refrigerator,” Bianconi says. “And I thought, ‘Well, that’s just unbelievable.’ It’s those little things that make the life of the staff so much easier. It’s not brain surgery. It was a very simple thing. And the staff was completely thrilled.
“The biggest thing really is communication.”
Hire the right people
More than once during the rapid growth of Progressive Medical, Bianconi tried to reward loyal, long-term employees with advancement into positions they either were not ready for or did not have the skill sets to succeed in. The results were disastrous.
“The skill sets and the challenges we have at the level we’re at today are very different than what we were at 10 or 15 years ago,” he says. “You have to attract the right kind of personnel whose skill sets align with the growth module.”
That’s why Bianconi has faced the sometimes-frustrating fact that when a company is growing as quickly as Progressive, promoting from within isn’t always a good move. The same can be said for allowing CEOs to get involved in the interviewing and hiring process for anything other than direct reports.
“I have always subscribed to what I call The Mother Duckling Rule,” Bianconi says. “In nature, the first thing the baby duck sees whether it’s somebody’s boot or a human being or the actual duck that gets imprinted upon the duck’s mind that that is the mother. It’s called mental imprinting, and I’ve tried to carry that forward in a business setting.
“Typically, most people have this conception that the person who hired you is the person who can fire you. People start forming their allegiances and loyalties first to the person who actually offers them the job. So I try to refrain from, myself, offering people positions to work here if they don’t have to report to me.”
After all, the hiring supervisor is the one who ultimately has to live with the decision he or she makes. And with the employee count at Progressive more than doubling from 135 to 360 in the past three years, it’s all Bianconi can do to make sure HR is simply screening out smokers.
“We are challenged every day to hire the very best people out there to bring into this company,” Bianconi says. “It’s all a way to increase our odds of being successful.”
HOW TO REACH: Progressive Medical Inc., (800) 777-3574 or www.progressive-medical.com
That’s why the desire to acquire can be so powerful, but it can also be disastrous if not done properly.
“We walk away from many more acquisitions than we buy,” says Mike Gasser, who has overseen dozens of acquisitions as chairman and CEO of Greif Inc. [pronounced Grife], a multibillion-dollar industrial packaging products company based in southern Delaware County. “The easiest thing in the world to do is to buy a company. The hardest thing in the world to do is to make that acquisition pay off to the shareholders.”
When Gasser became chairman of Greif in 1994, the company had about $500 million in sales throughout North America. Last year, Greif recorded $2.4 billion in net sales and was doing business in 43 countries on six continents.
“A big part of that was acquisitions,” Gasser says.
Greif essentially doubled its size from $1 billion to $2 billion in 2001 with the purchase of Van Leer Industrial Packaging, based in The Netherlands.
Before and since then, Gasser has helped orchestrate many of the smaller-scale acquisitions that have become Greif’s hallmark for fast growth.
“We do small, tuck-in ones that help broaden out a product line we have or enhance a market position,” he says. “We did three of those in about six weeks last year.”
“CEOs love to grow companies,” Gasser says. “But a big percent of acquisitions fail because they weren’t thought out right at the beginning.
“To do an acquisition just because someone called you and said, ‘Would you like to buy this?’ is a downward spiral.”
That’s why Gasser is very methodical in how he approaches prospective acquisitions.
“What started us down the path was we went back to our strategies,” he says. “We went through a very rigid strategic planning process. You need to start with, ‘What do you want to be when you grow up?’ It’s a very simple expression, but it’s a very real life example of needing to have a plan before you just jump into it.”
Greif’s ultimate plan, Gasser says, was to become a driving force in the industry.
“Once you agree on the plan, then start thinking about, ‘How do I get there?’ Is it product development? Is it organic growth? Is it acquisitions? Look at all the vehicles to get you to where you want to end up.”
Acquiring complementary business and industry competitors fit in well with Greif’s plan. But that didn’t send Gasser running amok with purchase offers. Instead, it got him thinking.
“We looked at our own internal skill set and said, ‘Do we have the ability to take a company outside our entity and merge it into our company?’ And if we did not, then what did we need to do to be able to get that skill set? You need to be honest with yourself. You can’t let an ego get in the way. If you don’t have the horses to pull the wagon, you better not buy the wagon.”
If growth through acquisitions fits in with your strategic plan and you have the organizational energy, intellectual capacity, people skills and financial resources to buy a company, it’s time to identify prospects.
“We have spent a lot of time understanding the industries in which we operate,” Gasser says. “We make sure we know who the players are. We make sure we understand what their strengths and weaknesses are, so if an opportunity comes up that they want to sell, we’re not starting from ground zero.
“There’s a lot of information out in the public domain today that you can get on companies and through trade associations and through contacts with customers and suppliers, so we know a lot about the companies that we compete against and industries we operate in.”
A big part of the information Greif employees gather has to do with company culture. That’s because culture is critical to Greif.
“We’re looking for culture first and foremost,” Gasser says. “If their culture is totally different than our culture, then it’s probably not a good fit. Our culture is one of trust, integrity, giving a fair value for a fair price. If that culture exists, that’s what we look for first. It’s sort of an intangible, but you know it when you see it.
“Obviously as you go through the process, there’s a fairly rigorous due diligence process, but if the culture is right, the numbers are right (then it’s probably a good fit). If the culture is wrong, then you question the numbers. That’s probably one where we’ll walk away.”
Other reasons Gasser would walk away from a potential acquisition target include a bad fit from a product standpoint or a geographical standpoint or if the company is losing money.
“Our company is really good at taking good things and making them better,” Gasser says. “We’re not real good at taking things that are poor and making them good. So if we look at an acquisition and it’s not doing well or if it’s losing money, we probably can’t think that we’re going to turn it around and make money.
“Some people have that skill set. We don’t. We understand that. You have to understand what your strengths are as you go forward.”
There’s no harm in walking away from a potentially lucrative deal if something even something seemingly small just doesn’t seem to fit.
“Some of the things you decide not to do are probably as smart or smarter than some of the things you decide to do,” Gasser says. “We pride ourselves on being very disciplined buyers, disciplined from the standpoint of making sure we don’t overpay for what we think the value is, that we don’t get out of our core competency, that we don’t invalidate our beliefs.
“Figure out what is important to you and your company and try to be disciplined to that. If culture is important, be disciplined to that. If it isn’t important, what is important to your company?”
Acquiring a company can be a slow process. But it doesn’t have to be.
“Sellers go into two categories: Those who completely open their books and say you can see whatever you want to, and those that are fearful and say, ‘I’m only going to give you things piecemeal-style until we get to the end,’” says Gasser. “So it really depends on what their attitude is.”
Because Greif does so many acquisitions an average of two or three a year, Gasser estimates the company has developed a due diligence checklist to help ensure nothing gets missed.
“That’s where people get into trouble, when they’re overly anxious and they miss a step or take something for granted,” Gasser says. “That’s why we try to make sure we follow a process and not let our excitement or enthusiasm for doing something overshadow the fact that we have a responsibility to make sure it’s the right fit for our company. You have to understand what is out there. Sometimes you find the grenades hiding in the weeds.”
Even if all the criteria fit and an agreeable purchase price is reached, the acquisition is destined to fail if integration is neglected or drawn out for too long.
“Integration is a very important part of any acquisition,” Gasser says. “There are two ways, in my experience, that you can do integration. You can do one with speed and less certainty, saying, ‘I need to get it done quickly and if I make mistakes, I’ve just got to be flexible enough to change those mistakes.’ Or I can do it slowly with certainty.
“What we have found that’s best for us is speed with less certainty and we make the changes, as opposed to letting it draw out.”
Take the Van Leer acquisition, for example.
“We were in The Netherlands to sign the papers on a Friday,” says Gasser. “We talked to them over the weekend and three days later the following Wednesday the people who led this company from around the world were here in our offices. That was our way of saying, ‘You’re now part of Greif, and we need to start this right now.’ Each entity has its own way of doing things, so the sooner we can integrate it into one, the better off we are.
“When I look at some of the failed acquisitions of other companies, the Chrysler-Daimlers, those, from afar, were probably because they didn’t try to integrate soon enough. They let them be their own entities. The longer you do that, the more entrenched they get and the harder it becomes to bring them into one.”
Finding the value
When companies are bought or merged, it inevitably leaves redundancies in jobs as well as facilities. Often, the purchasing company simply eliminates positions and locations from the acquired company. That may be easy, but it’s not always best.
“We made a promise to ourselves when we did acquisitions that we will always keep the best people and the best plants regardless of whether it was a Greif plant or an acquired plant,” Gasser says. “That’s the best thing for us long-term.”
Deciding what is best can be sticky, as each manager thinks his or her plant and people are the best. But Gasser has found a way around that.
“I have a big belief in human beings that they generally want to do the right thing,” he says. “So we try to put teams together made up of an equal number people. If we have five from Greif, we have five from the company we just bought. We give them a fairly quick timetable to go visit all the facilities that are in question and come back with a joint recommendation. It is very hard, but I’ve always found them to be able to come back with a recommendation.”
Checking your work
Charting the financial success of an acquisition at regular intervals is a good way to ensure the integration process is going as planned. Greif conducts post-acquisition audits in six-month, one-year and two-year increments.
“It doesn’t make much sense to measure it any sooner than six months,” Gasser says. “We have the business present ‘Here’s what we accomplished’ versus our plan. There is no plan that is fail-free, but we try to do a review just to make sure we are on track, and if we’re not, what do we have to do to tweak it? Did we not have as much sales retention? Did we lose more sales than we thought? Did we have more costs incurred during integration? Did we have logistics issues? People issues? The post-audit really focuses people back on the plan.
“After two years, it better be integrated into our systems enough that we should not be able to break it apart. There is a point in time when it is so immersed into the system that you cannot say which is Greif and which is the acquired company. If it’s not in two years, we have probably failed in that standpoint.”
Fortunately for Greif, that has yet to happen.
“We’ve been down this road a few times ... and if you go through all those steps, then I think you are well on your way,” Gasser says.
“In acquisitions, one of the most important things is to not get caught up in the moment. Ten percent is buying for the right price. Ninety percent is executing.”
How to reach: Greif Inc., (740) 549-6000 or www.greif.com