Gregory Jones

If you had a crystal ball in 2008 and were looking to work for a company that deals in the home improvement industry, you might have been advised to run for the hills. But Ben Davis had no crystal ball when he became president of N-Hance Wood Renewal, a franchise that renews kitchen cabinets and floors — and regardless of the challenges, found ways to grow the company.

“I took the president position with N-Hance in 2008, which was not the best time to take over a home improvement business,” Davis says. “However, when the recession hit, it’s not as if people stopped caring about their homes.”

In fact, in many cases homeowners cared more about their homes because they understood they may be in that home longer than they anticipated. With the recession taking hold in late 2008 homeowners began looking for ways to maintain their current properties and started demanding high ROI decor and remodeling project options.

“We’ve positioned ourselves to fit very well into that space,” Davis says. “We positioned ourselves not to be victims of the recession, but to be opportunistic about changing consumer demands with regard to home improvement projects.”

Instead of the traditional sand and refinish process, N-Hance Wood Renewal’s services renew the existing finish of cabinets or floors, adding additional layers of protective finish and changing the color if the customer wants to get a factory look without all the dust, dirt and inconvenience of having to be out of the home for a few days. And the process saves consumers considerable money.

In an industry where nearly half of mom-and-pop and smaller remodeling companies have evaporated over the last five years, N-Hance Wood Renewal has grown substantially in that same period.

Here’s how Davis grew N-Hance since 2008 and is positioning the company for further growth in the next five years.

Don’t participate in the recession

N-Hance has been very fortunate to have a stellar network of franchisees who took on a mantra of refusing to participate in the recession. Every year throughout the recessionary period, the company experienced growth.

“Any organization that was operating without a great deal of fiscal discipline at that time was in a pretty precarious situation,” Davis says. “We’ve always been a pretty disciplined organization. We’re always willing to spend where a growth opportunity presents itself, but we manage ourselves quite well.

“On the other hand, we knew we had some franchisees in the network that enjoyed the housing boom and didn’t have the rigor or fiscal responsibility within the organization.”

Davis wanted to make sure he positioned the brand and its service offering properly to maximize on changing consumer sentiment, but also that the company was taking all steps possible to give its network of franchise owners every chance at surviving.

“It was really a two-pronged strategy of ‘Let’s go out and create opportunity, but at the same time let’s make sure the ship is as seaworthy as possible,’” he says. “It was really helping our franchise owners focus and understand, and our marketing partners focus on and understand changing consumer needs and consumer sentiments.”

A marketing partnership it has with Home Depot has helped N-Hance increase its sales. When Davis took over N-Hance, he met with several kitchen designers in Home Depot stores throughout the country and discussed how frustrating it was for customers to come in with mismanaged expectations as far as time and budget.

“Customers want to do a kitchen remodeling project, but when they see that just the new cabinets alone are going to be $15,000 or $20,000 and their budget is $12,000, they either laugh or cry their way out of the store,” Davis says. “N-Hance can make old cabinets look brand new, change the color and update the look of them for a third or a fifth of the cost of new cabinets.”

Davis positioned N-Hance with franchise owners and marketing partners with a specific message: This is the key to seek consumers who are extremely frustrated with not doing the project they feel they want to do — or in many cases, that they need to do in order to sell their homes.

“This is a new option that allows customers to get more out of their remodeling budget,” he says.

Follow the strategy

The biggest aspect of Davis’ strategy for N-Hance was making sure the franchisees were more profitable and able to perform as growth ramped up.

“We had to seek all the opportunities and be very growth-oriented,” Davis says. “We launched a lot of new tools around helping franchise owners hire the right people and track their labor expenses, material expanses and understand in a very detailed way the economics of every job that they did.”

N-Hance created several initiatives to make sure the franchise network was as secure, robust and healthy as possible. Making the timing of the company’s partnership with Home Depot fortuitous.

“As a lot of other lead sources or places that we would find customers were declining, that’s when we launched our Home Depot partnership and said we need to open doors to new lead sources and opportunities we haven’t gone after in the past,” Davis says. “Home Depot is a major part of that strategy.”

Statistics show that roughly 80 percent of the people who are looking to do a remodeling project to their kitchen walk into a Home Depot design center for the next step. Cabinets represent 75 percent of N-Hance’s total revenue.

“If you’re a new service offering like N-Hance, and you have an uneducated consumer base out there, and 80 percent of them are walking into Home Depot stores, that’s a great partnership,” Davis says. “Home Depot found a home for us in their kitchen design center. In fact, they coined a phrase around the whole idea which is ‘replace, reface, renew — a solution for every budget.’

 “One thing we wanted earlier on that we weren’t doing nearly as well as we needed to be doing was getting referrals,” he says. “When our customers saw what we could achieve, we had this amazing moment of ‘Wow!’

“But we weren’t leveraging that unique moment of wow that we were creating in the customer’s home. We have been working with franchise owners on seizing referral opportunities and going after strategic alliances with stagers, real estate managers and property managers.”

Look to the future

Now that N-Hance has established its services and has built-up its partnerships, Davis’ focus is to grow the company’s footprint.

“We have 255 franchises throughout the United States and Canada,” Davis says. “We are looking for overseas expansion and in key markets throughout the United States and Canada. We have a lot of inventory available, so our big focus is building our network.”

One of the biggest ways Davis plans to build a more robust national footprint is to go after other opportunities that N-Hance hasn’t been able to go after like relationships with restoration companies, insurance companies and real estate companies on a national level. He also wants to grow the partnership with Home Depot.

“Today, we cover maybe 1,300 of their 2,000 stores and we want to be in all 2,000,” he says. “Our growth will also help us with the awareness issue among consumers considering a remodeling project. The more franchise owners we have out there that are helping to educate the public and advertising in their local areas, the easier that becomes.

“In my opinion we have a pretty sexy service offering that’s really fun to be a part of.” ●

 

How to reach: N-Hance Wood Renewal, (435) 755-0099 or www.nhance.com

Friday, 22 November 2013 06:09

Movers and Shakers – December 2013

Olympic Steel Inc., a leading national metals service center, announced several management promotions to support the company’s strategic growth.

Raymond Walker was appointed to the newly created position of president and COO – Flat Rolled. John Mooney was promoted to vice president – Eastern Region. John Howard has been named to the newly created position of director, operational excellence. Zach Siegal has been promoted to the role of general manager – Cleveland, and Matthew Kapusta has been promoted to purchasing manager – Cleveland.

Additionally, Olympic Steel Inc. has relocated its executive office suite from Bedford Heights to Highland Hills. The new corporate office suite is home to executives responsible for the strategic direction and oversight of all of the company’s combined operations including its flat, tubular and pipe products segments, as well as its growing Specialty Metals product line.

 

Kaiser Permanente Ohio has become HealthSpan. Starting Oct. 1, 2013, members of Kaiser Foundation Health Plan of Ohio are being served by HealthSpan Integrated Care. HealthSpan received approval from the Ohio Department of Insurance to begin providing care and coverage in Northeast Ohio.

The biggest change that most members will notice is a new name and signage that will begin appearing as the health plan and physician group begin operating as HealthSpan. HealthSpan is comprised of: HealthSpan Physicians, a not-for-profit medical group practice serving Northeast Ohio, and HealthSpan Integrated Care that will operate as a not-for-profit HMO.

Aaron Bulloff, an attorney at Kadish, Hinkel & Weibel, has been elected as a director of the Foundation of the Federal Bar Association for a two-year term beginning Oct. 1, 2013. 

In his new role, Bulloff will help support the Foundation’s mission of promoting and supporting legal research and education; advancing the science of jurisprudence; facilitating the administration of justice; and fostering improvements in the practice of federal law.

 

NAI Daus announced the hiring of commercial real estate veteran Cyndie O’Bryon as senior vice president, office division. With more than 30 years of experience in the Cleveland real estate market, O’Bryon brings a strong background in all aspects of office leasing that will bolster the firm’s efforts in that area.

 

Paul Clark, regional president of PNC Bank, Cleveland, received the Norman Cohn Hope Award during the Nov. 13, 2013, National Multiple Sclerosis Society’s 18th Annual Cleveland Dinner of Champions. This prestigious award was presented to Clark for his commitment to leadership, philanthropy and community service.

Clark serves on the board of directors for Baldwin Wallace University, Cleveland Neighborhood Progress, Cleveland Rock and Roll Inc., Cuyahoga County Invest in Children, Greater Cleveland Partnership, Musical Arts Association (Cleveland Orchestra), Playhouse Square Foundation, Team NEO, United Way of Greater Cleveland, University Circle Inc. and University Hospitals Health Systems Inc.

 

Dr. Toby Cosgrove, Cleveland Clinic’s president and CEO, has been selected as one of 70 new members of the Institute of Medicine (IOM), a prestigious national health advisory board.

IOM members are selected for their significant advancements in the fields of health and medicine, whether through research, teaching, clinical work or other contributions.

Cosgrove joined the Cleveland Clinic in 1975, performing more than 22,000 operations and earning an international reputation for expertise in all areas of cardiac surgery, especially valve repair.

Under his leadership, Cleveland Clinic has consistently been named among America’s top four hospitals by U.S. News & World Report and is one of only two hospitals named among “America’s 99 Most Ethical Companies” by the Ethisphere Institute. ●

Friday, 22 November 2013 06:01

From fundraiser to community impact worker

On his first day working at the United Way of Greater Cleveland Bill Kitson sat down for a 6 a.m. interview on WKYC-TV.

“It was a great opportunity to say hello to the community first thing in the morning on my first day,” Kitson says.

A 25-year United Way veteran, Kitson became the Cleveland chapter’s new president and CEO in June 2012. The Cleveland community was curious to hear how he planned to better the organization and its efforts in the community.

“Cleveland is my seventh United Way community,” Kitson says. “I’m really thrilled with the level of support of the United Way here, and the level of corporate support is just spectacular. It gives us a great base to build from as we try to create change in the community.”

The United Way of Greater Cleveland celebrated its 100th anniversary in 2013 and Kitson has been focused on changing the United Way from fundraiser to community impact worker.

Here’s how Kitson is working to improve the United Way of Greater Cleveland and its community.

Understand the issues

When you’re a new president or CEO, everyone has questions for you and they want to know what you’re thinking. You have to resist the urge to talk about that, and instead ask and listen to the people you’re with.

“There will be plenty of time to share your story and your point of view about the work that’s going on, but if we don’t stop and listen first we may miss opportunities to learn and grow even more,” Kitson says.

Kitson heard that the community wanted more focus around graduating kids, keeping families financially stable and keeping the community healthy.

“As I started hearing the aspirations of folks that swirled around those issues, those are the things our volunteers are looking at to see what our priorities should be in those areas,” he says.

Be strategic

One of the biggest shifts in Cleveland’s United Way has been focused around changing from fundraiser to community impact worker.

“We’re trying to engage our community in new and varied ways,” Kitson says. “So not only asking for your money, but for your time and asking you to volunteer in schools and in neighborhoods. We are also asking people for their voice and asking them to advocate and stand up for some of these issues as our community faces them.”

The engagement strategy is an important aspect for those organizations that are focused on a mission.

“You need to have a connection to your community beyond asking for a check,” he says.

This past year the United Way of Greater Cleveland has been strategizing and developing new plans that will ultimately make a difference in the community.

“When I talk about listening and understanding our community — that’s not just a two- or three-year thing, that’s a generational thing,” he says. “We have to get better about listening and understanding and knowing where we can impact our community best.

“When people think of nonprofits that they’re really passionate about, their involvement with them goes beyond fundraising, and we have a similar mission to create change in the community. There are a lot of folks out there who would get really excited about a richer relationship with their United Way and we look forward to that.” ●

 

How to reach: United Way of Greater Cleveland, (216) 436-2100 or www.unitedwaycleveland.org

Have you ever received an envelope in the mail saying you’re part of a class action lawsuit, never opened it and threw it out?

If that settlement was for $3 million and a big percentage of those people didn’t open those envelopes, do you know what happens to all that unclaimed money? It doesn’t go to the government. It doesn’t go to the lawyers. It goes back to the company being sued.

Crazy, right? But what if there were a rule that could be imposed to have that money, or some of it, go to charity? That’s what Ohio Lawyers Give Back, a 501(c)(3) nonprofit organization, is all about.

Ohio Lawyers Give Back is an organization started by Cleveland-based law firm Dworken & Bernstein Co. LPA and one of its partners, Patrick Perotti, in accordance with a legal doctrine called cy pres. The cy pres doctrine is used in class action suits to handle settlement monies that are unclaimed by class members after distribution is finished.

In one of Perotti’s first class action lawsuits settled for $800,000, he ended up being able to give extra monies in the amount of $185,000 to Cystic Fibrosis. When he went to present that check, Brooke, an 11-year-old girl with Cystic Fibrosis gave him a hug.

“I said to myself, ‘I’m never going to stop doing this,’” says Perotti, a board member of Ohio Lawyers Give Back. “I never thought getting a degree as a lawyer would allow me to do something like this. It’s not about winning cases, it’s about doing justice. I can’t think of a better way to do justice than what we’re doing with this program.”

While Dworken & Berstein has been practicing the cy pres doctrine in all of the firm’s class action suits over the past 15 years and has distributed more than $24 million to charities in conjunction with Ohio Lawyers Give Back, not every firm does this.

“We tried to work with the General Assembly to pass a law that would require cy pres to be paid in every case, but that there had to be a designation in the court order that said exactly what happens to the money and any unclaimed funds,” Perotti says. “The legislation was strongly opposed by the Ohio Chamber of Commerce and as a result it was not passed.”

Had the law passed it would have generated $60 million a year toward charities in Ohio.

“Ninety-nine percent of businesses would never scam customers, so why they stood up for that 1 percent that does the wrong thing is beyond me, but I guess it’s because some of these companies are very big and are very powerful,” he says.

If the law had passed nationally it had the potential to provide $13 billion a year to charities.

“We do it in our firm, and we came up with Ohio Lawyers Give Back after that initial case and following this policy of cy pres,” Perotti says.

“We used Ohio Lawyers Give Back to run a website where any charity that wants to can log on and find out how cy pres works, and anybody can recommend a charity. We then talk to them and send them paperwork to get them on a list for one of the cases that gets settled. We also send that list to other lawyers in the area that do class action suits.”

Very few lawyers follow this practice, however, because it doesn’t make the lawyer any money, it actually costs money.

“I could settle my class action years earlier if I were willing to do the scam dance and settle for $750,000, and I get my one-third knowing that $500,000 isn’t going to class members, like I don’t give a damn,” Perotti says. “But I do. I don’t want to sign my name to something I know is a scam. We’re in the vast minority.” ●

 

How to reach: Ohio Lawyers Give Back, (800) 378-9586 or www.ohiolawyersgiveback.org

Often when we hear the term hospice, we think of an elderly person who’s lived a good, long life and is now in need of end-of-life care. Cleveland-based Hospice of the Western Reserve, however, provides many more resources than just end-of-life care.

For instance, do you have a bucket list? The Hospice of the Western Reserve will give you one more shot at crossing an item off your list. Looking for resources about hospice care? It has one of the few nationally certified libraries dedicated to the subject. Have you recently experienced a traumatic event? The Hospice of the Western Reserve is often one of the first to respond to crises such as school shootings or suicides.

You more than likely didn’t know the Hospice of the Western Reserve did all of this. Since becoming its CEO in 2011, William Finn has been focused on making sure more people know about the Hospice of the Western Reserve and the numerous services it has to offer the community.

“There are 48 hospices in Northern Ohio and 158 in the state,” Finn says. “Part of what makes us unique is our ability to bring resources in a very significant way. Our scope of services, quality, reputation and innovation are the best, and it’s all based on customer service.”

This year, the Hospice of the Western Reserve celebrated its 35th anniversary. Finn wants to continue to focus on the matters that will keep the organization nationally recognized.

“Thirty-five years makes us one of the oldest hospices in America, and it’s a real testament to the staying power of the Hospice of the Western Reserve,” Finn says. “We talk about ourselves as the hospice of choice. When you have to make a choice about end-of-life care, we want to prompt you, educate you and support you in making the decisions that are best for you.”

Here’s how Finn continues to advance the Hospice of the Western Reserve while helping spread the word of its services and community programs.

Make the public aware

Not everyone wants to spend time thinking about end-of-life care, but it’s central and fundamental to what good living is all about.

“We make plans on how we want to retire,” Finn says. “We make plans on how we want to go to school and better ourselves and what we want out of work. We make plans on how and when to bring children into the world and raise them. Equally, we need to have a little bit of attention to say, ‘How would you like to live as you approach the end of your life?’”

The Hospice of the Western Reserve empowers its patients and families to be in charge of their care and make their own decisions, but ensures those people are making decisions that fit their needs best.

“We need to find the right touch points that help engage people in why these discussions are important and what they mean,” Finn says. “We are looking at how we influence people through community discussions and ways to engage, educate and empower people to make the decisions that are best for them when they find themselves in such circumstances.”

In addition to taking care of the elderly, the Hospice of the Western Reserve also provides care to a lot of different populations.

“We have one of the largest pediatric palliative care and hospice programs in the whole country,” he says. “What’s so unique about it is that it’s a pediatric-staffed program. We’ve taken the time and the cost to hire pediatric nurses, child-life specialists and people that have a bona fide expertise in pediatrics, and it makes a huge difference.”

Link to the community

It’s not just the people who come to the Hospice of the Western Reserve that receive the services of the organization. The Hospice of the Western Reserve is a community not for profit, and much of what it does every day creates linkages and webs into the community.

“One of the things we do that’s extremely unique is we have a nationally certified end-of-life library here,” Finn says. “It’s an actual library with a librarian. It not only serves professionals here in the U.S. but the entire world. The library has resources on a whole range of bereavement topics from things such as teen suicide to pet loss.”

Another resource offered by the Hospice of the Western Reserve is its community response to trauma. When there is a community tragedy such as a school shooting, teen suicide or car crash, its Elizabeth Severance Prentiss Bereavement Center is the first responder.

“The example that probably stands out the loudest is the Chardon tragedy,” he says. “When that happened, we did more counseling at Chardon than any other organization.

“We are back at Chardon often when these kinds of things hit the paper to help deal with kids who may be having horrible dreams and parents who are very nervous. Those are all natural responses, but they need help working that through.”

While work in the hospice field can be hard to handle more often than not, the Hospice of the Western Reserve strives to celebrate life.

“The more time you spend with us the more you realize this is not about death and dying,” Finn says. “That’s not why we’re here. That’s not what we do. What we do is make sure people live fully up until the moment they die, and we do that extraordinarily well.”

The hospice has a program it calls Life Enrichment in which patients can request to do one more thing before they die.

“As people approach the end of their life, sometimes it’s not the trip to Disney World,” he says. “Sometimes it’s talking to a brother they haven’t spoken to in 25 years, or someone who is worried their son won’t make it home from Afghanistan before they die.”

The hospice makes these wishes come true more than 1,000 times a year throughout 10 counties in Ohio.

“We do a lot of those things every day all over the 10 counties, and they are often unspoken and unseen except for the family that we’ve touched,” Finn says.

In addition to fulfilling patient requests, the hospice also gives patient’s families opportunities to spend time together through a program called Meal To Remember.

“When a family has something to celebrate or something to work through, it happens at the kitchen table,” he says. “That goes out the window when someone is sick.

“When somebody’s sick, all of a sudden you’re not eating dinner together. Life doesn’t feel normal anymore, and it certainly doesn’t feel enjoyable.”

Meal To Remember is a partnership with high-end restaurants to recreate that ability for families to be together at the table. Every month a different restaurant comes in and cooks a gourmet meal for the patients and their families.

“Often this is the last time patients are together with their extended family,” he says. “Many of our partner restaurants view this as the best use of their time and talents.”

Ongoing engagement

To be a world-class health care provider, the organization has to empower others to use the talent and expertise it has developed.

“We are an education institute and train the next generations of physicians in hospice and palliative care,” Finn says. “We are contributing to the field pretty significantly, more than any other hospice in Ohio certainly, and maybe even in the Midwest.”

The hospice utilizes about 2,500 volunteers, which puts it in distinctive territory.

“We’re the largest user of volunteers after United Way in Ohio,” he says. “These folks do everything. These volunteers are incredibly talented people that are retired from a position of expertise and now they’re bringing that expertise over here to help us out.” ●

How to reach: Hospice of the Western Reserve, (800) 707-8922 or www.hospicewr.org

Growing up on military bases, Suzanne Sitherwood felt right at home when she started in the oil and gas industry as a co-op college student working as a field worker for Atlanta Gas Light Co.

“I was out on trucks, in the dirt, with pipes and meters and so forth,” Sitherwood says. “Growing up on military bases it was an easy connection because of the men, trucks, uniforms, barbed wire fences and pipes. It all felt very familiar.”

She enjoyed what she was doing so much that following college graduation she decided to continue with the gas company. After 30 years at Atlanta Gas Light Co., where she had become president, she was recruited to The Laclede Group Inc. in late 2011 as president, and became CEO in February 2012.

The Laclede Group Inc. is a public utility holding company. Its primary subsidiary, Laclede Gas Co., is the largest natural gas distribution utility in Missouri, serving about 631,000 residential, commercial and industrial customers in St. Louis and 10 other counties.

With Sitherwood’s expertise in the industry and The Laclede Group poised for growth, the combination sparked a period of change.

“Part of the reason we created The Laclede Group was for growth,” Sitherwood says. “That was one of the reasons the board recruited me here. I was one of the architects with the prior company I had worked for, and it became the largest in its peer group.

“So the board was interested in bringing me here and growing The Laclede Group so we weren’t just one gas company, but could become several gas companies.”

Here’s how Sitherwood got The Laclede Group off and running toward growth mode.

 

Prepare for change

Having built her previous employer into the largest in its peer group, Sitherwood knew how to grow a business. Now, she was joining a new company that she had to get acquainted with before making any sudden decisions.

“I came here in September 2011 and that gave me a chance to lay low and meet the executive team, get to know the strength and talent that existed here, and begin to formulate that 90-day plan,” Sitherwood says. “I had a great opportunity between September and February to do just that, so when Feb. 1 rolled around, we were ready to move forward.”

Even more than getting up to speed, Sitherwood was pleased to see that The Laclede Group had balance sheet strength and strong leadership already in place.

“If you’re going to have a growth plan, you need to have a strong balance sheet,” she says. “It was nice to see a 150-year-old company ready for growth. The other piece was the senior leadership. There was a very strong team in place. However, it wasn’t organized in a way that it could integrate other gas companies.”

In order for The Laclede Group to bring in other gas companies to grow its portfolio, Sitherwood led a reorganization to line-up talent in specific roles and build the company into a business unit structure that could integrate additional gas companies.

“I needed to restructure the company to be business units with shared services,” she says. “The other challenge was technology. We’ve implemented a three-year technology plan to have enterprise systems so we can scale our technology to those other companies.

“We also needed to have standardized policies and procedures. They existed from an institutional perspective and generally the company knew how it operated around certain policies, but they weren’t documented, transparent and available. So we did that.”

Lastly, the way Laclede communicated and engaged the rest of the company was very insular because it was just a single gas company. Sitherwood needed to change that mentality.

“If you’re going to have a growth strategy, you need to talk to your employees,” Sitherwood says. “You need to be able to explain your industry and why you’re doing that, and they need to believe in it. But also, there are external stakeholders. We needed to be very proactive about talking to the investment community, regulators, our board and our shareholders.

“We needed to make sure that we were saying the same thing to our employees that we were telling the regulators and investors. We’ve spent a lot of time on that endeavor and quite frankly, I think we’ve done a nice job on that.”

What was most crucial for Sitherwood in those first few months at Laclede was the ability to get acquainted with the company and then create a vision for growth.

“You have to do your homework the first 90 days,” she says. “Don’t come in assuming one thing or the other. Come in and do your homework, but then chart that vision and stay focused on it to keep it alive.

“Sometimes you can come in with a lot of energy and then slow down instead of keeping that pace. If you back off the pedal after six to eight months, it quits feeling real to people.”

While you have to remain focused on your vision and growth objectives, you might also have to adapt to certain circumstances as you go.

“If it’s anything like it is around here, you’re changing the tires while you’re driving the car,” Sitherwood says. “You’ve got to keep the energy and the pace up, but at the same time not overwork people and keep them energized around it.”

 

Embrace your growth

Soon after Sitherwood came to The Laclede Group, the company had entered into negotiations to buy a company called Missouri Gas Energy. Sitherwood’s restructuring was a big reason the company was a front-runner in those negotiations.

“Had we not restructured, yes, we could have grown, but going through that due diligence process, that bid process, we had a clear line of sight to what that would look like because we already had the organizational structure in place,” Sitherwood says. “If I had closed that transaction and brought that company in while having to reorganize at the same time, it would be more chaos that’s not necessary.”

Some would argue against putting the organization in place first, because there is either an expense to that or there is a danger you won’t grow.

“I find that very interesting, because if I have a growth strategy and we all believe in it, we’re going to grow,” she says. “Why wouldn’t you organize around that? Why wouldn’t you put the fundamentals in place from a financial perspective and policy perspective and then stay focused on your vision?”

Laclede acquired Missouri Gas Energy from Energy Transfer Partners LP in September 2012.

“Energy Transfer Partners was clear from day one that Missouri Gas Energy was not strategic to them and they were going to divest this gas company,” Sitherwood says. “So we started working through a very competitive bid process and at the end of the day we were the bidder of choice.

“This is not a one-and-done. We’ve got a pretty strong corporate development group and we’re constantly modeling and analyzing other opportunities, and we hope to continue to grow the gas business.”

As of August, Laclede Gas Co. served 631,000 customers and with the Missouri Gas Energy acquisition it added north of 500,000 customers.

“When you add the two utilities together, we serve around 1.2 million to 1.3 million customers,” she says. “Why that matters to us is because we’re here to serve those customers as a gas company.

“The other metric I look at is how interested are institutional buyers and retail buyers in us? When we went to market to issue our equity, we ended up having a very strong offering. What that told me was people were very interested in us, had done their homework on our financial metrics and that was validating to me that we had the right strategy.”

In addition to a focus on acquisitions, The Laclede Group started a brand called Spire, which is all about natural gas-powered vehicles, further expanding the company’s services.

“This could be the future of natural gas in our country,” Sitherwood says. “Out of all the hydrocarbons, natural gas is 30 to 40 percent cleaner. The supply is long because of shell gas, about 100 years. The prices are low and volatility is non-existent. There’s a $1.50 spread in terms of a per gallon equivalent. Natural gas vehicles today seem to make sense.”

Spire was launched in partnership with Siemens and is just another part of Sitherwood’s grand vision to grow The Laclede Group.

“I enjoy the idea of growing this company,” Sitherwood says. “We’re now off and running.”

  

Takeaways:

  • Do your due diligence when acquiring a new company.
  • Construct a vision for growth and follow it.
  • Find opportunities that expand on your vision.

 

The Sitherwood File:

Name: Suzanne Sitherwood
Title: President and CEO
Company: The Laclede Group Inc.

Born: Norfolk, Va.

Education: Received an industrial engineering degree from Southern College of Technology and a master’s in business administration from Brenau University.

What was your first job and what did you learn from it? I was a lifeguard working for the military. I taught individuals to swim who joined the military. I was always amazed the number of people who joined the military and never learned to swim. Living on a military base, I saw how leaders would take young individuals and build a team and inspire them to do the things they needed to do.

What is the best business advice you have ever received? You learn more from your mistakes than you ever will from your successes. You’ve got to take calculated risks and learn from them.

If you weren’t CEO of The Laclede Group, what would you want to do? I would want to take time off and travel around the world. It’s not so much about the travel for me, but about immersing myself in different cultures and appreciating different people and what’s important to them.

If you could speak with one person from the past or present, with whom would you speak? Barack Obama, since he has a few years left there are some critical issues our country has to deal with on an international level and a grass roots home level, and I’d enjoy talking to him about that. I don’t think he’s going to find the time on his calendar for me, but you never know.

Sitherwood on leadership: Leadership to me is not management. It’s about people and really inspiring them to do things individually and collectively that they didn’t think they could do. That’s what gets me up every day.

 

The Laclede Group Social Media Links:

Facebook: www.facebook.com/LacledeGas?ref=hl
YouTube: www.youtube.com/user/LacledeTV
Twitter: @LacledeGas 

 

How to reach: The Laclede Group Inc., (314) 342-0873 or www.thelacledegroup.com

When Calgon Carbon Corp. made Randall Dearth its new president and CEO, it was somewhat of an easy transition — the former Lanxess CEO had been a member of the Calgon Carbon board for six years.

“I knew a lot of the high-level issues, the potential emerging markets and a lot about the products and people here,” says Dearth, who in August 2012 joined Calgon Carbon, a 1,100 employee, $562 million global leader in the manufacture, reactivation and application of activated carbon, ballast water treatment, ultraviolet light disinfection and advanced ion-exchange technologies.

Dearth spent his first several months at Calgon getting to know the people, plants and processes, but wasted little time making some necessary changes in the company.

“One of the first things I decided we needed to do was focus on margins and margin improvements,” Dearth says. “Aside from learning the company, I also spent a lot of time trying to come up with programs to help improve the bottom line for our shareholders.”

In doing so, over the past year, Calgon Carbon has implemented a $30 million cost improvement program. Dearth looked at things such as headcount optimization, product rationalization and brought in consultants.

“We’ve done a lot to focus on how we can quickly and effectively improve our margins to give our shareholders a benefit,” Dearth says.

Here is how Dearth used his previous experiences to put it all together to improve Calgon Carbon Corp.

 

Make an assessment

What excited Dearth about coming to Calgon Carbon was the possibility of using some of his experiences at Lanxess, which helped turn that company around, to see if they were applicable at Calgon.

“Coming into this role I had my toolbox of tools, and the question was could I apply this to Calgon Carbon to help improve margins quickly,” Dearth says.

The biggest obstacle Dearth saw was the company’s culture. He didn’t want to shake things up to a point where the culture would be disrupted.

“You can’t underestimate corporate culture,” he says. “You can come in with a lot of ideas and techniques and be rearing and ready to go, but if you don’t take the time to understand the culture in which you’ve come into, that doesn’t work.”

Dearth was fortunate that he had an overview of the culture from a board perspective.

“It’s not a matter of having the right culture or the wrong culture,” he says. “It’s understanding that it’s different and trying to manage around that.”

Calgon Carbon has been around for more than 70 years. The foundation of the company is very solid, but sometimes that foundation can be the issue.

“When you are a company that’s 70 years old, sometimes you do get into that mentality of this is how we’ve always done it,” says Dearth, who also served as president and CEO of Bayer Chemicals Corp. from 2002 to 2004. “Part of what I’ve done over the last year of being here is really focus on trying new things to make our company better, our employees more efficient and ultimately bring more value to shareholders.

“The other thing I was able to bring to the table coming from both Bayer and Lanxess is a global perspective. As a smaller American company, Calgon hasn’t looked at global opportunities the same way that a bigger company would. I’ve spent a lot of time restructuring our businesses to focus on more global decision-making.”

 

Implement changes

A decline in gross margin percentage year-over-year, from 32.7 percent to 30.2 percent, had a significant impact on Calgon’s 2012 bottom line. Central to the effort to improve these margins was the company’s launch of a $30 million cost and profit improvement program.

“We have already completed the first phase, which will provide $10 million in annualized savings beginning in 2013,” Dearth says. “The second phase, already well underway, should result in another $10 million in annualized savings beginning in 2014. The third phase, which we have begun to implement, will provide an additional $10 million in annualized savings when completed.”

Cost savings obtained in phase one resulted from personnel reductions worldwide, manufacturing improvements, reduced R&D spending in 2013 and the closure of an idled manufacturing facility in China. Cost-saving opportunities for phase two are the result of product rationalization, global procurement and streamlining of operations.

In addition to these cost saving measures, Dearth decided to restructure the company’s business units, which took a lot of uncertainty out of the organization and had a positive impact on the culture.

“Calgon had previously been structured by function,” Dearth says. “So you had a sales department led by a VP of sales and a marketing department led by a VP of marketing. The regions were totally autonomous and did their own thing.

“Calgon Carbon is big in essentially four segments: municipal water treatment, industrial and food applications, specialty carbon applications and UV technology. So we took our sales people who are focused on these areas and our best marketing people in these areas, and gave them autonomy under the leadership of a business unit head to drive their business.”

Since implementing that change, communication has been much better, and there is a better sense of where the company’s challenges and opportunities are in its markets.

“People have a better sense of the purpose of what their job is and what they themselves can influence,” he says. “Customers like it because now it’s clear as to who knows their business and their markets. It has also increased accountability, and it’s clearer as to who is driving the ship.

“When everybody had a small piece of it and things went awry, there was really nobody who said I’ll fix it and drive it forward because it was only a piece of their responsibility. That’s what we restructured, and we did it early in my tenure here, and the next step is to take that global.”

Dearth’s success in making all these changes within his first year as CEO started with the team around him.

“First and foremost, you have to understand the team around you, because your team is going to make or break you,” Dearth says. “Are they understanding where we need to go? Are they qualified to do the job? That is critical.”

Secondly, Dearth created a vision of where Calgon needed to go and how it would get there.

“I not only need to buy in to those key people I just mentioned, but the employees, my board of directors and ultimately the investors who are putting their money into our company need to know where I believe this company can go and how I’m going to get them there,” he says.

Lastly, Dearth took the time to understand the organization and its businesses.

“I’ve spent a lot of time asking the right questions and putting task teams together to evaluate whether we are doing something the right way or should be doing it differently,” he says. “You don’t want to get too far into the weeds, because you lose sight of the bigger picture, but it is important to have a good sense of what you’re good at and what you’re not good at, and it all ties into making the decisions to take the company to a different level.”

 

The next level

Despite all that Dearth has already accomplished to get Calgon Carbon on a better path, there is still a lot of work to do moving forward.

“We’re still dealing with the global economy that is at best a little shaky,” Dearth says. “That is one challenge we need to overcome. We need to constantly be looking at further optimization. China has become a big player in a lot of industries and activated carbon is no exception.

“We need to look at how they will affect our business going forward. Keeping one step ahead of the Chinese competition is a challenge to make sure we’re the best at manufacturing, marketing and have a global presence that we can compete in.”

Another aspect Dearth will continue to focus on is company culture.

“Company culture gets easier and easier once people get it and they understand there is a leader in front of them that they can trust and is taking them where they need to go,” he says. “That doesn’t happen in 10 months. It’s a long process to get everybody on board and that’s still a challenge I have ahead of me.”

Those few challenges aside, Dearth is looking forward to entering three new market opportunities. One is a water ballast treatment system — the U.S. Coast Guard will be requiring ships entering the U.S. in 2014 to have a ballast water treatment system to remove and treat the water going in and out of the ships.

The second one is mercury — all power plants in 2015 that burn coal will be required to remove the mercury, and activated carbon has been shown, and is being used, as the material that can take the mercury out of the smoke stacks when coal is being burned.

Third is related to Calgon’s municipal water business — the U.S. Environmental Protection Agency is requiring that certain disinfection byproducts and certain species that are formed when chlorine is used as a disinfection need to be removed from the water, and activated carbon takes it out. Those municipalities that have this problem need to comply.

“On top of the fact that we’re improving the company’s efficiency, we’re also positioning ourselves for great growth.” Dearth says. “We have a very solid balance sheet and I’d like to expand our business. So we’re looking at both internal cap-x projects and outside investments that can grow our business.”

 

Takeaways:

  • Assess your business opportunities and areas in need of improvement.
  • Implement changes to address those needs.
  • Continue to focus on what will grow the company to the next level.

 

The Dearth File:

Name: Randall Dearth
Title: President and CEO
Company: Calgon Carbon Corp.

Born: Warren, Ohio

Education: Received a bachelor’s degree in chemistry from Hiram College and a master’s degree in polymer science and engineering from Case Western Reserve University.

What was your first job and what did you learn from it? I was a head lifeguard when I was in high school. That taught me a lot about leadership and being able to rally people around a cause. It was a great way to get a tan too.

What is the best business advice you have ever received? Always ask yourself, ‘Have I created value today?’

Who do you admire in business? I’m a huge fan of Harry Truman. In 1945 when Roosevelt died, here was a guy that was not supposed to be successful, came from humble beginnings and was not prepared at all. However, he let his instincts do what needed to be done and surrounded himself with the best people and things worked out. That’s kind of how I am. I’m given what I have — my training, experiences and background and I’m going to focus on doing the best I can.

What do you like most about Calgon Carbon Corp.? The fact that we’re solving environmental problems, not only for today’s requirements, but for the future.

 

Calgon Carbon Social Media Links:

LinkedIn: www.linkedin.com/company/calgon-carbon-corporation
Randall Dearth on LinkedIn: http://linkd.in/17PslhD

 

 

How to reach: Calgon Carbon Corp., (412) 787-6700 or www.calgoncarbon.com

One of the most unique aspects of Chevron Energy Solutions is that its largest customer is essentially itself — parent company Chevron Corp. Jim Davis, the energy group’s president, is quick to report that the relationship is mutually beneficial — and the cause of sustainability.

Chevron Energy Solutions is one of the largest installers of solar power in the U.S. public sector, including a recent innovative sustainability program involving the city of Livermore, Calif., expected to reduce its energy costs and save taxpayers nearly $10 million over the next 25 years.

That kind of savings is exactly what Davis and Chevron Energy Solutions have been working toward.

Earlier this year, Smart Business caught up with Davis at the EY Entrepreneur Of The Year World Awards in Monaco to discuss sustainability efforts within the energy industry and the U.S., as well as how the company remains innovative.

 

Invest in sustainability

To date, Davis and Chevron Energy Solutions have helped customers save a collective $1 billion in energy costs — and those solutions also include cost efficiency for Chevron itself.

 “Chevron has roughly a $7 billion annual energy spend running our worldwide operations,” Davis says. “Not only do we make a lot of energy, we use a lot of energy to make that energy. We go all around the world to our upstream and downstream operations and look for ways to reduce our energy footprint.”

Since 1992 Chevron has improved the energy efficiency of its own operations by more than 30 percent. Had the company not done that, its energy spend would be around $10 billion instead of $7 billion.

“Our company is growing rapidly, and we’re making huge capital investments in new projects, so our energy spend is always going to be increasing because of the growth of the company,” he says. “It’s really important that we manage our existing operations, as well as make sure that we build into the new projects.”

While Chevron itself is Davis’ single largest customer, Chevron Energy Solutions also offers those same services externally.

“We go out into the communities where we do business, and we leverage our expertise around energy efficiency, power system reliability and renewable power to help those communities lower their cost of energy, improve aging facilities and look for innovative ways that we can help impact what those entities are faced with every day,” Davis says.

Companies, towns and cities have to address sustainability efforts whether it’s due to internal or external pressures. If these organizations are not aware that climate change is a real phenomenon, they are being made aware by shareholders and stakeholders.

“At Chevron we see sustainability as a core part of every initiative that we do,” Davis says. “One of the largest projects that Chevron has is our large natural gas project off the west coast of Australia, a highly sensitive environmental area.

“There are tremendous natural gas deposits there that we can develop safely and environmentally friendly and sell to the Asian markets where they have a voracious appetite for energy, and natural gas is the cleanest burning natural gas there is.”

What made the Australian government invest in this project despite its environmental concerns for that sensitive area is that it’s going to become the largest carbon sequestration project in the world.

“We are going to capture all the carbon that’s emitted from producing the natural gas and inject it down so there is a minimal environmental footprint,” he says.

Another aspect of energy that Davis and his team are focused on is power reliability, especially in emerging countries.

“Power reliability is a challenge that every emerging country goes through,” he says. “In the United States, our electric grid is probably the most reliable in the world, but it’s now aging and in need of upgrades and infrastructure.

“We’re working on the opposite end of the spectrum. Emerging countries like different African nations need the basic infrastructure to provide high-quality, reliable power so they can attract manufacturing and technology companies.”

While the U.S. has one of the most stable electric grids in the world, it still lags behind some other countries.

“We’re probably behind a few other developed countries that either for price needs or other drivers might be slightly ahead, but the United States is a huge nation geographically,” Davis says. “Some of the countries that may be ahead of us are much smaller in terms of geographic footprint. Therefore, the challenges of meeting some of those sustainability efforts are easier.”

 

Focus on innovation

As any business goes through its various stages of growth, the leadership has to use different sets of skills. This year marked Chevron Energy Solutions’ 13th year as part of Chevron.

“In the startup days, you have to be very innovative, hire and retain talent, refine your business as you deploy in the marketplace, and you learn things from it,” Davis says. “You also have to be the steady hand, the calm in the storm, as you create this business and exude the leadership and confidence that this business will be successful.”

Today, with a solid track record of business success, Davis can focus on what’s next and think more strategically and longer term than he could in the early days.

“I think more about developing people, successors for key positions and recruiting and developing future talent, he says. “I think about execution of our projects and our business to make our company as successful as possible.

“In the long term, I’m thinking about innovation and new growth opportunities for the business. My style has evolved as the business has matured.”

As Davis has grown in experience, he has learned how to remain disciplined and focused on the core things in his business versus stretching too far.

“When you’re an entrepreneur, you feel like you have never met a deal that you didn’t like,” he says. “You only have limited resources and limited time to be successful. You have to stay disciplined and focused and being able to say what we are not is every bit as important as being able to say what we are.”

That ability has led Davis and Chevron Energy Solutions to remarkable success and won him the EY Entrepreneur Of The Year 2004 Northern California Award.

“We didn’t build a business to win an award, but what I found was that winning the award was meaningful to our employees,” he says. “It was a source of pride to our employees that we were recognized externally for the great work that they were doing.”

Attending events such as the Entrepreneur Of The Year Awards gives Davis opportunities for networking that he normally wouldn’t have.

“I run in energy circles, and it’s rare for me to meet the CEOs of companies in consumer products,” he says. “In many cases, those connections have led to unique business opportunities for us.”

Those kinds of opportunities, while beneficial, are a small percentage of how Davis drives innovation at Chevron Energy Solutions.

“There’s a real creativity to the solutions we provide to our customers, our engineers are looking at creative ways to solve our customer’s biggest challenges around energy,” Davis says. “At the same time, our customers want us to keep them on the proven edge of technology and the proven edge of innovation as opposed to the cutting edge.”

With other technologies, you make a decision to buy a product you may have to replace in just three to four years, but energy infrastructure has to work for decades.

“We want to innovate, but we want to make sure there’s going to be the long-term performance there,” he says.

One of the ways that Davis encourages innovation is through partnerships with technology startup companies.

“We look for alliances and what’s next in technology that can drive improvements and enhancements in our industry,” he says. “When we see a technology that’s promising we’ll start working with them and provide them with real-world market feedback.

“Secondly, as those technologies become ready for demonstration projects, Chevron will host those and try them out ourselves. That gives us experience with how those technologies perform and how to install them and operate them. That gives us the data and confidence to help them get to commercial deployment.”

Once those technologies are viable and ready, Chevron Energy Solutions can act as a built-in sales distribution channel.

“Our people are always looking for innovative ways to do things with the discipline of knowing that at Chevron we have to represent our brand and stand behind everything that we do and our customers expect us to keep them on that proven level of technology,” Davis says.

 

 

Takeaways:

  • Focus on sustainability in all aspects of your business.
  • Change your leadership style and skills as your business matures.
  • Find new innovative opportunities in your industry.

 

The Davis File:

Name: Jim Davis
Title: President
Company: Chevron Energy Solutions

Education: Bachelor of science degree in business administration from The Ohio State University.

Items of note: Since 2000, Jim Davis has built Chevron Energy Solutions into one of the world’s leading energy efficiency and renewable energy services companies and the largest developer of solar power solutions for education facilities in North America.

The company was named a Top 50 firm by Fast Company in 2009, and in 2004 Davis was recognized for his achievements as the Northern California winner of the EY Entrepreneur Of The Year Award for social responsibility.

 

Chevron Social Media Links:

Facebook: www.facebook.com/Chevron
Twitter: @Chevron
Jim Davis on LinkedIn: www.linkedin.com/in/jimdavisces

 

 

How to reach: Chevron Energy Solutions, (415) 733-4500 or www.chevronenergy.com

EY recently announced promotions of seven professionals based in its Northeast Ohio offices.

Doug Campbell was promoted to partner. He is a member of EY’s Transaction Advisory Services practice. Campbell has more than nine years of experience serving private equity and corporate clients on the buy and sell sides, and he has extensive carve-out divestiture experience relating to sales and tax-free spin-off transactions.

Aaron Swartz was promoted to partner. He is a member of EY’s Assurance practice. Swartz has more than 13 years public accounting experience serving multinational Securities and Exchange Commission registrants and non-public clients primarily in the diversified industrial and consumer products, chemicals, transportation, retail and entertainment industry sectors.

Dan Tompkins was promoted to partner. He is a member of EY’s Advisory practice. Tompkins has more than 15 years of experience working with companies in a variety of industries from a financial, operational and strategic auditing and process improvement perspective.

Michael Dreis was promoted to executive director. He is a member of EY’s Tax practice. Dreis has more than 15 years of diverse business and project management experience serving various industries, including retail, heavy and light manufacturing, utilities, automotive, pharmaceuticals and distribution companies. His functional specialization includes accounting methods, inventory, capitalization and depreciation, the research credit, Section 199 deduction and Internal Revenue Service audit support.

Gary Hengelsberg was promoted to executive director. He is a member of EY’s Assurance Practice. Hengelsberg has more than 17 years of experience providing accounting and auditing services to a broad range of clients, primarily in the industrial products, consumer products and automotive industries. He is responsible for leading teams to support the internal inspections program and other internal monitoring and regulatory activities.

Ed Kilbane was promoted to director. He is a member of EY’s Assurance practice. Kilbane is the director of Americas Assurance Implementation and works with representatives across North and South America to embed new firm policy and enable technology into the audit practice. He has more than 20 years of experience and has worked in both a client service and operational capacity over his tenure

Colin McFarlane was promoted to director. McFarlane is the Global Content Management & Production leader at EY, leading a large global team providing world-class content services across its global enterprise internally and on the EY public website. He is responsible for the strategic development of EY’s content management capability, enabling infrastructure and processes.

 

Kadish, Hinkel and Weibel recently announced its partner, Stephen L. Kadish has been named the Best Lawyers 2014 Cleveland Tax Law “Lawyer of the Year.”

Kadish has been a leading tax attorney in Cleveland for more than 40 years. His practice areas include taxation, estate planning, probate and business law. Kadish was a founding member of Kadish, Hinkel and Weibel in 1975 and has been a veteran lecturer on tax and business planning matters.

 

Blue Technologies Inc., an office technology provider, announced its acquisition of Smart Solutions Inc., a Beachwood, Ohio-based IT solutions provider to clients in the education, legal, professional services, government and corporate sectors.

Smart Solutions will become a wholly-owned subsidiary of Blue Technologies renamed Blue Technologies Smart Solutions. Bill Julka, president of Smart Solutions, will remain onboard as vice president and all employees will be retained during the acquisition.

Blue Technologies expands its footprint into the IT space by more than doubling the service and support teams to provide users with an unparalleled level of knowledge and skill.

 

Great Day Improvements LLC has announced that Sven Kramer has been promoted to national sales manager. He moves to this position from general manager of Stanek Windows, a division of Great Day. 

In his new position Kramer will oversee sales training in all markets where Great Day sells its Patio Enclosures, Stanek Windows and SoftWall Finishing Systems. He began his career as an installer with the predecessor of Stanek Windows.

 

OverDrive, the world’s leading distributor of e-books and other digital media to libraries and schools, announced the appointment of Lee C. Milstein to the new position of chief strategy officer. 

Milstein, who previously held leadership roles at YouTube, AOL and DivX, will lead OverDrive’s emerging digital media businesses, including the expansion into streaming video, education content, services and help direct the company’s overall strategy and strategic partnerships.

In addition to Milstein’s strategic role, he will also lead a market development team that will be based in New York City. ●

 

When it comes to running a family business, some decisions can mean the difference between running the company for a few years before selling it and keeping the business in the family for generations. Kirk Zehnder stood at that crossroads a few years ago with Earnest Machine, and it took some critical decisions to find the long-term path.

Earnest Machine is a 65-year-old, family-run, industrial distributor of nuts and bolts with 75 employees. Zehnder, whose grandfather started the business, is president and CEO.

“We stepped back and said, ‘We can probably run this business for five or 10 years and have a good lifestyle business, or we could make some hard changes and focus on the long-term,’” Zehnder says. “We decided to focus on the long-term and so a lot of family exited the business.”

Some family members took over a main part of the business while Zehnder and other family members retained the distribution side of the business.

“We are selling 2,000-year-old technology,” Zehnder says. “Yet, we embrace change pretty well and we mitigate the family madness that comes with family business.”

Zehnder has been CEO for five years now and his biggest challenge has been changing the focus from the business to the customer and looking at the industry in a bigger perspective.

“We really had to broaden our perspective of the industry and what we do in the industry, and then focus on creating the best customer experience we can,” he says.

Here’s how Zehnder is making the tough calls to keep Earnest Machine running strong.

Make critical decisions

By pausing and thinking about where you want your business to be in the future, you’ve taken the first step to go in a new direction.

“Five to 10 years is a realistic number,” Zehnder says. “Most people can see where they’re going to be in five years. When a company or a family wants to sit down and truly design where they want the business to be in five years, those things start to highlight the weaknesses and the threats start to become apparent.”

Looking out long-term for Earnest Machine helped to address some of the family dynamics that were influencing decisions.

“It’s never easy having some of these discussions,” Zehnder says. “It’s kind of like the credit business — you pay now or you pay later. Sometimes people’s feelings get hurt and people disagree. But you know that’s short-term versus the long-term unwinding of a family business.”

Make the customer count

To keep Earnest Machine growing and in a strong position, Zehnder knew the focus would have to be on the company’s customers.

It seems obvious to have a focus on the customer rather than on the business itself, but in an established family business, the managerial attention sometimes gets paid to things that are less relevant to the business.

“Industrial distribution is five to eight years behind other trends,” Zehnder says. “People aren’t thinking any differently about their nuts and bolts purchases than they are about their coffee. So by focusing on that, we think we set ourselves apart to be different.”

One of Earnest Machine’s recent investments has been its website. Customers can now log in and manage their own accounts. The company can also create custom shipments for customers such as putting their name and logo on the box.

“We have seen over the last five to 10 years that the customer’s expectations have changed pretty radically,” he says. “We took the approach that we are competing with the best retail organizations out there creating a customer experience — that’s who our real competition is, it’s not the people selling nuts and bolts. A little shift in the perspective of the customer gave us a boost that adds value to the company and to our customers.” ●

 

How to reach: Earnest Machine, (800) 327-6378 or www.earnestmachine.com