As the order enters the system, a raw materials request is aggregated with its sister division many miles away, bumping the price into the next lowest category. Several qualified suppliers place bids on the Web, and an e-procurement program signals the low bidder it has been awarded the order for the raw materials.
The supplier's system responds with ship and arrival dates, which are automatically inserted into a work order. A lead time is assigned and an acknowledgement generated for the customer via EDI, including an in-house arrival date.
Thom Ruhe, vice president of business development of FutureNext Consulting Inc., asks, ''Can you imagine the possibilities?''
The eighth-floor downtown offices have a great view of the city and the ambience of yesteryear. The hardwood floor creaks as young staffers gather around a conference table, leaning on support columns, sitting on file cabinets and talking in indiscernible tech language.
There is no mistaking this company for archaic as the high-energy 30-something group discusses hyperlinks, Flash technology, cookies and transactive content integration. The team at FutureNext is hard at work.
Creating front-end Web sites, portal development and the integration enterprise applications are but a few of the solutions the 3-year-old e-business consulting company delivers. Its forte lies in providing innovative solutions to complex supply chain management issues, and its success is evident in its fast-paced growth.
Like so many Web-driven tech firms, FutureNext was not exempt from market pressures and declining confidence in e-business. But despite the release of a dozen employees earlier this year, it appears to be not just surviving but well poised to begin another stage of growth.
Formerly known as Vantage One Communications Group, the business was purchased by FutureNext in 1999, becoming one of 10 offices from Los Angeles to New York that total approximately 300 employees and $75 million in private equity capital.
Success may be due, in part, to the company's niche focus in supply chain management solutions, a technology investment that has high probability for positive effects on a manufacturer's bottom line.
In the Cleveland office, Ruhe analyzes the macro picture of the Northeast Ohio market. Tom Hileman, vice president of technology, climbs atop the mountain of technological advancements to segregate the microcosm of supply chain intelligence from the vast pool of enterprise applications.
Although they focus on different aspects, the two agree that Northeast Ohio's highly industrialized economy is a hotbed for the execution of Web-based supply chain management.
Not just another trend
Supply chain management programs speed up the administrative-laden procurement processes, cut manufacturing costs and may drive middleman suppliers out of the equation. From procurement to production to payment, Ruhe says the key is in how the technology is applied to the processes.
''Most companies have some flavor ... some degree of automation,'' he says.
E-procurement, most typically utilized in industry, not only compresses the delivery timeframe with suppliers, it can drive down costs by communicating to the world a company's aggregated requirements. Also known as net market or an exchange, when an order enters an automated supply chain, it acts as a catalyst in a cascading effect.
Another cost reduction comes in mandating suppliers to put product-tracking information online. Ruhe suggests a company could repackage shipment data, reframe it as though it came from your Web site, and, in essence, shipment data is outsourced for free.
Ultimately, procurement systems drive out time and expense.
''My supplier's supplier is seeing that part requirement at the same time that their client, my supplier, is seeing it,'' says Ruhe. ''More than any of the sexy stuff that's on the Web, this is where the money is really being made for companies.''
Manual production forecasting can meet, exceed or totally miss the mark against production capacity.
''A lot of companies that don't have an automated process, and take sales not knowing whether or not they have any ability to meet that demand,'' says Ruhe.
Supply chain management allows for companies to track key performance indicators with a business intelligence system. If demand exceeds capacity, a business intelligence tool will notify production and marketing to take corrective action, whether that is horizontal marketing (shifting demand to another product), raising prices or borrowing allocated manufacturing time from other products.
Picking the low-hanging fruit
''Just about anything in manufacturing is very well suited to benefit from this type of technology,'' Ruhe says.
Not only can suppliers do online pricing via a bid process, additional efficiencies can come from client relationship management systems that can push customers into a self-service mode.
''Instead of you maintaining a call center staff of say, 30 people, you find that maybe 15 people are sufficient,'' Ruhe says. ''That's 15 bodies you're not paying salaries on.''
While many innovative applications such as wireless are getting attention right now, Ruhe says, ''the old traditional bricks-and-mortar company is going to get a more immediate return on investment dollars in supply chain management than they are going to with wireless. Let's walk before we run.''
A glimpse at the future
Of the wireless applications that loom as potential killer applications, Hileman says those that cover production tracking or location-based services hold the greatest promise.
''Motorola is making these little chips less than about half a centimeter square that you can put on products and track them wherever they are,'' Hileman says. ''You can truly have inventory management without going out to the warehouse and shooting everything with a bar coder.''
Future wireless communication for the B2B marketplace may be done with these radio frequency tags, he says. And applied to inventory and raw materials, companies will be able to better manage production schedules because they'll know whether what should be on the shelf is actually sitting there.
''If you don't know what is in the warehouse today, how do you know what you can make?'' Hileman asks.
Location-based services would not only transmit the location of manufactured products, they would indicate where the product is along the supply chain process. Whether on the conveyor system, in a delivery truck, sitting in a warehouse, at the point of sale or consumed by the consumer, products could always be tracked.
The problem with getting this technology into the hands of consumers, Ruhe says, is price. But research and development for less expensive manufacturing processes is underway.
And there's another issue that must be addressed, Ruhe says. The technology has ramifications that potentially infringe upon privacy concerns.
''Imagine, if you will, the manufacturer has the ability to know when you've consumed a product,'' he says.
Take the analogy one step further and think about a case or two of beer.
''Imagine if that data can be shared by insurance companies,'' says Ruhe, adding that they could know if you consume one or two cases of beer each week. ''See where I'm going with this?''
Unlocking the door to wireless communication may open nearly endless opportunities in gathering business intelligence information. However, when testing is complete and advancements in technology have driven down the cost, no locked door will stop a company from knowing what beer you drink or car you drive.
How to reach: FutureNext, 888 479-8663
The American Federation of Labor and Congress of Industrial Organizations are fertilizing union growth with some big bucks.
Gone are the days of heavies breaking up wildcat strikes with baseball bats and chains. The old strong-arm tactics that used to be synonymous with the AFL-CIO are no more.
In their place are strategic plans and educational support foundations, which combine with cash reserves in excess of $10 million. Today, the recently founded AFL-CIO Organizing Institute teaches the art of union organization by a different book.
Rather than wage an adversarial campaign, today's unions have adopted a new tact -- the strategy of promoting employee involvement as a method of success. The message goes like this: The successful company is the strong company. The strong company is stable. And that means it provides steady employment and treats its workers right.
David Schreiner is familiar with the fervor and excitement union organizers can rally within a susceptible organization. Schreiner, a partner with Millisor & Nobil Co. LPA, a Cleveland-based firm dedicated to practicing labor law, says that understanding the atmosphere that nurtures a union drive is an important first step to creating a barrier. Changing that environment is the second.
He suggests determining the satisfaction level within your work force and adopting action steps that create a retention-conducive environment. To arm your business against organization, Schreiner says do not wait to react. Rather, fortify the company with a healthy dose of a union immunization -- knowledge, communication and commitment.
An ounce of prevention
Everyone needs that inherent sense of self worth that comes from feeling like an integral part of something bigger. Unions often fill that need by giving people "something to belong to, to be a part of," Schreiner explains.
Provide a forum for your employees that offers them a voice within the organization, he suggests. That will fill the need and provide other benefits, as well.
And, while unionization is not prevented by one program, it is also not caused by one event. By being proactive and laying out a total commitment from the top down, along with the policies to support that commitment, you're using knowledge to strengthen your business without outside interference.
Establish communication methods and commit to a schedule. Keep everyone informed of changes in profitability, market-driven demands on the industry and key customer successes and failures.
Small- to mid-sized companies often cannot pay the highest wages, Schreiner says. So combat dissatisfaction by fostering a team-oriented environment based on mutual respect.
Pay particular attention to prime work force union targets. Those include employees over 50 years of age and those younger than 30. While young people are hungry for cash and willing to listen to union organizers' promises of wage increases, older workers typically seek job security and financial stability. Schreiner says union organizers will tailor their strategy to fit the individual's greatest concern.
And, while most businesses simply cannot promise higher wages and no layoffs, owners and managers can understand and eliminate irritants such as inequitable or inconsistent rule enforcement, ignoring employee grievances, discharging without prior warnings, making policy changes without explanation or employee participation and ignoring seniority in shift assignments.
With deeper pockets, unions now offer a greater array of benefits, so check the health of your benefits package. Do you offer a credit union? The union does. Many also offer discounts at major retailers and phone companies, drug and alcohol abuse programs, day care facilities and even an AFL-CIO credit card.
During a battle, the front line requires the most reinforcement and suffers the greatest number of casualties. The same holds true in business. Front-line supervisors are the voice of the company on a day-to-day basis, setting the tone, creating the atmosphere and enforcing policies.
Do not limit supervisory training to understanding company policies and improving technical skills. Instead, Schreiner says, commit to the expense of soft skill education in interpersonal communications.
Consider training your company's managers in hiring process techniques such as interviewing and reference research. Then, train them in crisis management, employee confrontations and terminations, and give them the tools they need to communicate corporate changes to the rest of your work force.
At the same time, do not underestimate the importance of published policies. A written manual helps maintain consistency, while an investment in an employee relations audit and opinion survey is less expensive than a union election.
By committing the time, energy and resources to keeping your business healthy you'll increase your bottom line while keeping the door closed to unionization.
How to reach: Millisor & Nobil Co., L.P.A., (440) 838-8800
Deborah Garofalo (email@example.com) is associate editor of SBN Magazine.
At 13 years old, Michael White should have been playing ball and running a paper route. Instead, the then-political wanna-be volunteered to work on a campaign that whetted his appetite for politics.
Thirty-seven years later, White is winding down his final term as mayor of Cleveland, saying he wants to raise his children and spend time with his wife. During his 12 years in Cleveland's City Hall, White never sugar-coated the truth or danced around the issues.
One thing that can be said about the White administration era is that it was never lukewarm. Cleveland's movers and shakers either loved or hated the man who successfully divided and united Cleveland's political machine at the same time.
His plans? Rest. His regrets? None. SBN Magazine talked with White about his legacy, his leadership and where Cleveland's business community goes from here.
Mayor White, is there a legacy you leave to Cleveland's business community?
I'd like to believe that our economy is stronger than it's ever been, that more people are working, that our business sector is strong in all areas and that our construction of seven new industrial and commerce parks has lent itself to improving the economic environment. Our recognition by Inc. (magazine) that we have the most significant group of growing inner city small businesses is a part of the legacy.
But also, I think that there's an inextricable link between a city's economic strength and (its) education strength. The better prepared your children are, the stronger your secondary education system is and the better and more competitive a community's going to be in the area of business.
People are either very hot or cold about the White administration era. Why do you think that is?
Frankly, that's not a matter I've dwelled on. I'm a person that pretty much sets the course, and as long as I believe it's a good course, I'm going to try and achieve my end.
Why say goodbye to politics now?
I walked into city hall at 24. Two weeks from this coming Monday, I'll be 50. (White turned 50 in August.) I worked my first campaign at 13. I spent two-thirds of my life in politics and half of my life in government. For me, now is a time that will offer me a chance to have what I've not had in a long time -- time with my family.
Second, it will allow me to spend a lot more time with my wife and do some things we haven't been able to do. Most people don't get in as early as I did, but I've been doing this a long time.
What do you hope the next mayor of Cleveland will concentrate his or her efforts on?
First of all, I pray to God that the next mayor of Cleveland will defend the town. There are a lot of forces out here that are trying to marginalize the city, minimize the city with new buzz words like regionalism, and sell off assets. I think it's extremely important that the next mayor do what I've tried to do, and to especially do what Tom L. Johnson (mayor of Cleveland from 1901 to 1909) did, and that is defend the city.
Education should remain at the top of the list and also continued expansion of the airport, which is extremely important for the creation of new economic opportunities.
Do you look back on your administration and have any particularly proud turning points or nagging regrets?
I've thought a lot about that, and I'm not quite sure what it says about me, but I don't have any regrets. I've seen a lot of politicians who think the public expects us to be perfect. The public doesn't expect us to be perfect. What they do expect is for us to come to work every day on their behalf and do the best and most honest job we can do.
I believe that if I had run (this year), I would have been elected, because the majority of people in Cleveland know I come here every day with the belief that I work for them, that they're my shareholders and I'm going to do the very best job for them.
I'm not going to always win the Mr. Popularity contest, but I don't have a high need to be loved. I do have a high need to achieve. I'm proud of a lot of things that we've been able to do, but probably the one thing that I'm most proud of is very intangible, and that is that Clevelanders no longer are walking around with bowed heads. Our heads are erect and straight. We've got a spring in our step.
We're very proud of where we come from, and we're not afraid to tell anybody anywhere in the world that, yes, I'm from Cleveland, and I'm damn proud. We're a town that believes in itself again. We're a town that knows now we can run with the big dogs and not just survive. We can prevail.
Are you disclosing who you are supporting in the race?
No, not at this time.
What is the biggest challenge the new mayor will face?
The most important things that leap out at me include education and completing the expansion at Hopkins Airport. We're building a second runway and we'll need a third in about 15 years. The Brookpark agreement is key to achieving not only a new runway, but peace with all of our neighbors at the airport.
I hope our new mayor will understand how important that is. I also hope that my successor will never sell the airport or any other asset owned by the people of the city of Cleveland.
Can the new administration concentrate on the airport and diversity issues simultaneously?
Absolutely. They go hand in hand. Cleveland's business community will never be a world-class business community unless it clearly embraces diversity. That world is black and brown and yellow and red, and they speak 123 different tongues with more than 600 religions.
We are microscopic in terms of how we reflect the rest of the world. Embracing diversity is a major key if our large corporations are going to be players on the world's economic stage.
What thoughts would you like to leave with as you prepare to say goodbye as Cleveland's leader?
I guess I would just leave one point. My goals as of Jan. 1, 1990, have been to make Cleveland as competitive a community as possible. And I don't mean competitive in a negative sense, but one that can attract growth, attract new residents, attract expansion and create jobs.
As I look at my time winding down, I'm confident that we're a far more competitive community today than we were in January of 1990.
Deborah Garofalo (firstname.lastname@example.org) is associate editor of SBN Magazine.
Goodman is the executive director of the Cleveland Foodbank.
The Foodbank focuses on alleviating hunger in the Greater Cleveland area, which is a massive undertaking. The Foodbank distributes 18 million pounds of food annually to more than 400 hunger programs in six counties; the task takes the efforts of 60 employees and 5,000 volunteers, and has a $5 million budget.
Since joining the agency in 1999, Goodman has streamlined hunger relief efforts in Northeast Ohio. In 2001, she managed a merger with Food Rescue of Northeast Ohio, another nonprofit food distributor working with local charities, eliminating the duplication of services and streamlining costs.
Last year, Goodman helped plan and execute the Foodbank's merger with the Greater Cleveland Committee on Hunger. She was responsible for Harvest for Hunger, one of the largest drives of its kind in the nation -- the 2003 Harvest for campaign was the most successful drive in its history, raising $1.95 million and more than 660,000 pounds of food for 19 counties.
It also reaped a $100,000 savings in administration overhead and took the Foodbank one step closer to its goal of putting fewer dollars into overhead and more into its mission.
The Foodbank's current $10 million capital campaign for a new community food distribution center is near completion. The center will replace four separate Foodbank facilities and provide a $250,000 annual cost savings.
Goodman's leadership of the Cleveland Foodbank impacts hunger relief efforts beyond its six-county borders. She coordinated Cleveland's participation in the largest national hunger study ever conducted and serves on the board of directors of the national association of food banks, America's Second Harvest.
Goodman's passion, hard work and inspiration is manifested in the many successes of the Cleveland Foodbank, such as more than doubling its fund-raising revenue and feeding more than 14 million meals to hungry men, women and children in our community.
How to reach: www.clevelandfoodbank.org and (216) 696-6007
DeGrandis says creating relationships with the people you serve helps you better understand their issues, move the community forward and become a stronger organization.
More than 150 members of the hospital's management team are board members or actively share their talents with local nonprofit organizations. One leads a local development corporation designed to advance the business interest and residents' needs around Fairview Hospital; another is chairman of the board of Hospice of the Western Reserve. Many managers sit on regional chambers of commerce.
"It's clearly the best investment that an organization can make -- to allow the time of its staff to be shared with others," says DeGrandis. "It's part of our culture, and our service multiplies many fold when we do it in that manner."
To stress the importance of community service, DeGrandis incorporates the value of it into evaluations and reviews.
"We talk about the shared mission of our organization and that of others, and we clearly make it an expectation of the responsibility of a leader," says DeGrandis.
Just as important as connecting with communities is the reciprocal value created by better understanding your clients and steering your service accordingly. So the hospitals' staff doesn't wait for the people to come to them; they go to the people. That philosophy was instrumental in forming The Parish Nurse Program, which puts nurses into more than 50 congregations and parishes to conduct health screening and counseling. The nurses also help people connect with other resources within the hospital and the community.
"It brings the ministry of the hospital and the ministry of a congregation together," DeGrandis says,
The hospitals also work closely with the North Coast Health Ministry, which provides care to those who don't have access to it due to their finances.
The Western Region's hospitals partner with other service organizations to lead or work on service opportunities, such as Senior Circle Plus, The EMS Academy, The Stephen Ministry Program, Laura's Home, the YMCA, United Way and the American Red Cross.
Says DeGrandis, "What we're sharing is our staff --the heart and soul of our organization."
How to reach: Lakewood Hospital, (216) 521-4200 or www.lakewoodhospital.org; Fairview Hospital, (216) 476-7000 or www.fairviewhospital.org; Lutheran Hospital, (216) 696-4300 or www.lutheranhospital.org
Danforth has effectively moved from arguing cases in her matter-of-fact style to empowering women through networks and development programs. In the process, she is changing herself as much as she is changing the culture for women in Cleveland.
Danforth is just one of a growing number of women executives and entrepreneurs who are shattering the so-called glass ceiling. In fact, women are the fastest-rowing segment of business owners in the United States, and women-owned businesses employ 28 million people and contribute $3.6 trillion to the national economy.
So it should come as little surprise that this year's five panelists in "Perspectives: A Conference for Women in Business" are as unique as the industries they dominate.
Maureen Cromling operates Ross Environmental Services, one of Northeast Ohio's leading hazardous waste management companies with more than 200 employees. Yet she speaks with as much passion about being a breast cancer survivor as she does about being the unlikely successor to the family-owned business.
Sandra Pianalto, president and CEO of the Federal Reserve Bank of Cleveland, is only the second person at the bank to be promoted to CEO from within, and one of just three female presidents in the history of the Federal Reserve system. Her prestigious career spans 20 years, and began as an economist in the research department.
Yet Pianalto says an integral aspect of her development came at age 9, when she was tutoring her Italian-born parents in English and government for their citizenship tests. She says that experience taught her more about the U.S. political system than most American adults know.
Dr. Catherine Henry has joint appointments in the departments of General Internal Medicine and Otolaryngology & Communicated Disorders at The Cleveland Clinic Foundation. In her highly successful career, the only thing holding her back was herself. Henry conquered her own inertia to spread her wings and excel in a brave move from the Michigan-based Henry Ford Medical Group, where she completed her residency, to the Clinic.
And Rose Jenne started her illustrious business career at the age of 14 in her father's country store. She began her $50 million telecommunication products distribution company because, simply put, she needed a job.
As beautifully unique and inspiringly different as each of these women are, one common trait is evident through each of their careers - success is less about conquering an industry than it is about conquering oneself.
Smart Business sat down with each of these women to explore their careers and thoughts on a variety of business-related topics. The five will speak on these and other issues April 20 at the 2004 Women in Business conference.
Playing the career game
My career is like football and the Hail Mary pass. I was vice president in charge of public affairs and the secretary to the board of directors at the Federal Reserve Bank of Cleveland when I was offered the position of COO.
I had no operations experience, no background in operations whatsoever.
When the COO took an early retirement, I was asked to step into his role and was in a state of shock. There were nine senior vice presidents with operating experience ahead of me. Our CEO Jerry Jordan was the quarterback going for the long pass.
Jerry and the board wanted to change the way the organization operated, which was a culture of command and control. They wanted to bring the employees into the decision-making process.
They threw the Hail Mary pass because I was a woman with no operations experience and the first COO to come from within the bank in a very long time. That risk was the launching pad that put me in the CEO role.
My career has been over a long period of time. I've had to be very persistent, kind of like digging in your heels for the long run.
Ross Environmental is a family-owned business, so I've had the unique dynamics of working with my mom, dad and siblings. My older brother was the heir apparent. All I wanted to do was show my dad and mom that I could do something really well. That meant doing something that nobody else wanted to do.
My dad and brother loved engineering, the mechanical and operations side of the business. So the pivotal point in my career also became the pivotal point in our business development.
In 1980, the single largest regulation ever published was passed -- the Resource Conservation Recovery Act. I decided I was going to become the expert in this regulatory area. And, as it turned out, the Conservation Recovery Act became a critical component not only to our company's success, but also to our entire industry.
Areas for continuous improvement
Self-confidence. Unless you have confidence in your ability to accept new challenges, you can't rise to those challenges.
You get lost in the shuffle. You settle for second best because you'd never think you can be the very best.
Letting go. Letting go is hard. It means empowering others.
I still wanted to do it all myself, but when Jenne Distributors hit $50 million in sales, I knew it was time to let go. I needed experienced people who had been there, done that. I knew my limitations.
Good judgment. The Fed wanted to change the way it operated and needed a quick learner with good judgment.
It's not easy to listen to and draw people into the decision-making process. Especially if they were used to having someone call all the shots -- what to do, when to do it and how to do it.
Financial style -- in one word
Dr. Catherine Henry
Planning. In my personal life, I'm focused on making sure my retirement is taken care of. My dad was a partner in a small company and did very well financially.
But a series of events caused him to lose everything. Now, my mom lives on a small Social Security check. I'm planning for my retirement with an investment adviser and basically, I do what he tells me.
Serious. Fiscal responsibility is a critical part of business. Ross Environmental is privately held, so we don't have some huge corporate parent supporting us. The buck stops here, and I take that very seriously.
Our industry is very capital intensive, so we understand the value of forecasting. During the recent economic downturn, we understood our finances so well -- where we made money, where we didn't, what things cost and where we could cut -- that we were able to make intelligent decisions.
You don't wait until the roof falls in before you fix it.
Conservative. That's the nature of the Federal Reserve Bank. We are very risk-averse, and we have controls in place that no other organization would pay for. Our books balance to the penny every single day.
Personally, I don't take risks, either, and I tend to be more of a saver than the average person. That comes from watching my parents' financial struggle.
So it's more my life experiences that influence how I view finance rather than if I'm a man or a woman or even the job I have.
Calculating. Finance is my very strongest point. I run my company conservatively because bottom line growth is extremely important to me. I take risks, but only well-calculated risks.
On the other hand, I take more risks with my personal finances. I love the market and I watch it daily. I'll invest in other companies in my industry but only because I know the industry and who's doing well and who's not.
Relinquishing. It's a terrible thing to abdicate my responsibility over my finances, but I can't do everything.
Other people handle finances better than I do. So I let them.
Betting on health
One of the biggest health issues people face is that they don't take time for health, time for exercise, time to really pay attention to themselves. It's true for both men and women. But I think the bigger stress falls on women because they often end up having more family responsibility.
I try really hard not to make family responsibility a women's issue, but truthfully, it is. Women are often under a bigger time crunch than men. That leads to stress, which is a huge factor in the risk for heart disease, affects your immune system, and ultimately has implications for cancer risk.
It simply boils down to taking the time to put yourself first. It's my job is to remind you of that.
Health issues are based more on a person's age and stage than their rank within the corporate structure. Younger women have children and all the challenges that children bring. Whereas, older women have the care of her parents and all the commensurate challenges that brings.
So, the most dominant influence on your health is your stage in life and challenges you face.
However, the higher you go up economically, the more choices you have. And the converse is obviously true.
But women are caregivers, and as such, we seldom take time to take care of ourselves.
In my early career, I was educated and trained to make intellectual decisions. That's probably how I can account for some of the major mistakes I've made. I just wasn't attuned to the importance of that intuitive reaction, the value of the voice that brings the holistic being together with the decision.
Now I recognize the importance of listening to that voice and I rely on my gut, even when my gut and my head are diametrically opposed.
There are some things you simply can't quantify. Sometimes you just can't add up the numbers. You have to base your decisions on the people and the situation and then let how you feel influence you. You'll know when you're right.
I trust my gut a lot. In 1995, we had had an explosion at the plant. Fortunately, no one was hurt, but it shut us down for six months. Our revenue dropped to virtually nothing.
Then, the following year, I was diagnosed with breast cancer and soon after, my mother died. That's when you start to say, I don't I think I can do this anymore.
My Christian faith became very important to me. I literally put everything in God's hands. That's when I realized I can only do the best I can do. I also realized that the people working for me could only do so their own personal best.
I think that surrendering to God was a gut reaction. When you have that much coming down on you, you realize that there's no way you can do it all. So rather than giving up, I simply decided I'm not going worry about what I can't control.
Those life-changing events impacted me, my relationship with God and my trust in myself.
Mentoring -- giving and getting back
When I entered the insurance industry, I was a rarity -- an African-American female in an incredibly white male environment. There were no role modes. There were no mentors. I didn't even conceive of having a mentor.
Much of my career progressed in solitude. And it wasn't easy.
Now, I have a professional coach, and I can't conceive of life without her. I also make sure I mentor, just not in the traditional way. I'm more like as an adviser. The women I mentor have very specific goals. And so do I. Mentoring has created some of my best relationships.
In nonprofits organizations, there's less career laddering than in the for-profit sector. In fact, the mindset is, come in, do your best and stay until the executive director leaves.
To counter that, I've begun working on succession planning. As part of my community responsibility, I need to prepare my managers to be leaders in other nonprofit organizations. It's a shift in mindset and pretty different from the philosophy of most nonprofits. For me, that's why mentoring is especially important.
In our business, we have an open-door policy and career development opportunities. My management team is a part of that process. We all mentor, just not in a structured way.
When someone wants to do more -- work on special projects, get more formal training -- we put together a targeted program. We try to understand their desires, their career path, their strengths and weaknesses. My management team is a part of the process because every member has a different strength, a unique skill and approach to offer.
As far as having a mentor myself, I've had a lot of people that influenced me. And some of them have been my advisers.
Because we're a smaller company, we use our legal and financial advisers as kind of quasi-management members. I look for advisers with high morals and good basic values because they not only help me with my business, they help me maintain my moral compass.
Things don't always turn out the way we want, and we won't always win. But by maintaining high morals, I can look myself in the mirror. I'm satisfied with that.
I believe it's really critical for women to intentionally mentor other women. The field of medicine naturally lends itself well to mentoring.
Once you get out of the classroom, it's like a rotating apprenticeship.
But once you're an established physician, you have good intentions to continue mentoring but not enough time. So we're just starting an online mentoring program at the Clinic. It's like a bulletin board. This way, if you have something to contribute, you can, and more people will be able to participate.
Also, I think it's important to recognize that mentoring can come from anywhere. You can learn different things from different people. Some of my best mentors were men.
When I first joined the bank, our president was the first woman president at the Cleveland Fed. However, our officer team was comprised 100 percent of white males. When your management team doesn't look anything like you, you simply don't put those types of positions on your radar screen.
Today, women have role models in senior positions to aspire to. And the bank is in the process of developing a more formal mentoring program. Informally, I do a lot of mentoring now. I also am mentored through the boards I sit on.
When you are the most senior person in your organization, you run out of people to learn from - you're the top person. Sitting on boards gives you the opportunity to learn from a lot of CEOs from a lot of different companies.
Outside the office
I sit on many boards, probably a few too many --Cleveland Tomorrow, Cleveland Roundtable, The Growth Association, Leadership Cleveland, The Northeast Ohio Counsel on Higher Education, Catholic Diocese Foundation Board, The Akron Center for Economic Education and the United Way.
I got to know a lot of the civic and business leaders in Northeast Ohio through my board activities. That's important whether you're male or female, but especially important for women. And it is not good enough to just sit on a board. You need to contribute and get recognized by other board members. The one thing you don't want to do is be on a board in name only.
Participating on a board is also a good way to do some of the things you like, some of the things you don't have the opportunity to do in your own job. It gives you a chance to develop your skills.
Philanthropy is very important to me. Just because I give my time and talent to the YWCA, it doesn't diminish my obligation to support nonprofit organizations. I believe it's my responsibility to give to those who are in circumstances different from mine.
But I have a 13-year-old daughter, and getting her to age 14 will be my greatest accomplishment in my next year. There are just so few hours in the day that you have to be incredibly selective with your time.
My evening time goes either to my daughter or my church.
Family is very important to me. I have two grown sons and six grandchildren. My husband and I enjoy spending time with them.
We have a place in Tennessee that's isolated from the rest of the world. It's our oasis where we all get together. When you're too close to work, it's tough to free your mind.
In my community, I'm on Team NEO, the foundation at Lorain Community College and am very active in our church. The church is important to me, so I try and give as much time to it as I can. How to reach: The Federal Reserve Bank of Cleveland, (216) 579-2000; Ross Environmental, (440) 366-2000; YWCA of Greater Cleveland, (216) 881-6878; Jenne Distributors, (800) 422-6191; The Cleveland Clinic Foundation, (216) 444-5000
Although HP has a hefty $250 million training budget, Burnett says that unless you keep employee training in line with your company's overall performance strategy, it may not matter what you spend.
SBN sat down with the 19-year HP veteran during her recent visit to Cleveland. Burnett discussed how the corporate giant reaps the benefit from its training dollars and how that strategy can be used with businesses of any size.
What makes HP's training strategy different from other corporate universities?
Approximately two years ago, we changed our training strategy from being driven by individual managers' requests to a program driven by the overall business strategy. Now, the business plan and performance requirements drive what we do.
That may seem simple, but it's a huge shift. I'm only offering the training and development that's critical to our business strategy. We're not about being a full service university. We're about enabling the business strategies to the business performance.
I think we were meeting management needs based on, say, five managers vs. looking at an (overall) strategy of the PC business.
We don't do basic skills. If you don't come with basic skills, you've got a problem. We do offer programs that help people be more effective. They're very tied to what those people have to do and the competencies required for that business. (We're) really looking to enable a department strategy not a business strategy.
What were the major changes?
We went from about 70 fragmented, decentralized training centers buried deep in the company to an integrated organization. We put ourselves under the scrutiny of a governing body -- of line leaders looking at the portfolios and mapping them to their individual business strategy.
We had a portfolio of more than 50 leadership programs. For the first time in the history at HP, we took a look at those 50 different programs and the executive competencies we were trying to build and asked ourselves, are they building the competencies our executive team believes our HP leaders need?
Guess what? They weren't.
Considering all the changes you've made, what is the most important?
Measurement. I absolutely believe you must and can measure training. For example, consider sales. If you want to increase the size of the deal and decrease the time it takes to make the deal, that's your goal and you can measure it.
We introduced a negotiating program -- a set of tools -- and an environment of management support around those tools. We measure deal time and size before training and we measure deal time and size after training. In the end, we shortened the deal time and increased the deal size.
You can work in general terms but you have to tie it to the specific performance you're trying to change. You have to have a specific goal in mind. If you don't, you're dead.
Can you measure this in terms of the bottom line or employee worth?
We go in with a team and translate the managers' time to value metrics. That means we interview people, we look at what they're doing and we talk to managers.
We determine the average time to decision, the average time to successful execution and the average time to conflict resolution. We put a value number on each, multiply it by the salaries of the decision-makers and that gives us a time metric and a dollar metric.
Then we ask if the managers want to decrease this by half -- half the dollars at half the time to reach value. I've never met anyone who didn't say yes.
The next step is to pick the team for dynamic leadership. We coach them through the program for eight weeks. At the end of those eight weeks, we come back and do the time to value metrics. We've only had the first eight-week session but we were able to reduce their time to value.
Training that consists of offering a course catalog is the university approach. Engaging in a business conversation and helping people understand the barriers to better performance, that's training that makes a difference. It's not simply asking, 'What training do you need?'
Can companies with a small budget do successful employee training?
You don't need a large budget, but more important, you don't need to do a whole bunch of things. I think you need to do a few things really well.
There are a couple questions you have to ask. What's going on that's blocking my organization from being high performing? What's in the way of producing great client relationships or new business for our company or hitting our revenue targets?
Brainstorm that list with your team and get them engaged in identifying the two or three performance blockers that are wrapped around your capability. Then take that list to the training department or training manager. Ask them to help your team work on the problem, not sell you a course.
What I've noticed with small to medium businesses, they want to put a chip on every block -- they feel they have to have management training, they have to have this, they have to have that. They aren't thinking about what are the critical capabilities they need to be a success. They could probably do more with less.
My advice would be really look at your business strategy and lay your development capability right next to it and see if there's a line of sight.
Do you have any advice about getting the most for your money from training?
Find someone who knows who the key players are in the industry. Then go to them with the business problem. Ask them how they would address it.
Once you've crystallized the problem, you can get some suppliers to bid based on whether they move the needle up the scale for you. In other words, they don't get paid unless they improve your statistics or solve the problem.
I try very hard to make performance contracts like that. Ask them, 'Are you in it to improve the performance or not?' If you are, this is a gain contract, meaning the more you improve performance, the more money you get.
Agree on how you will measure performance upfront. I believe anyone can get benefit from their business's training dollars by focusing on their business's problems.
Neither Elsmore’s formal education or extensive corporate training prepared her for this type of speech, but joining Toastmasters' club -- Speak Easy did.
At Toastmasters employees practice speech giving in order to improve their communication abilities. "Each member gets the opportunity to improve their skills," says Eric Johnson, Schwab's senior relationship manager and Speak Easy's president. "The other benefit is we're building partnerships across our entire organization."
In addition, members learn to be better listeners. "If you want to be a good speaker, you have to learn how to listen critically," says Jeanine Murray-Wilson, Toastmasters' District 10 public relations officer and Speak Easy's mentor.
Murray-Wilson says a good presentation starts by preparing a good speech. A good speech should have a beginning, middle and end, the rule of thumb is don't forget to the basics.
In addition she stresses to make sure the subject is interesting to the audience by effectively capturing the audience with right off the bat with an opening hook a joke or anecdote. And Murray-Wilson urges any speaker, regardless of the technicality of the subject to stay away from jargon, use words economically and keep sentences short.
She also suggests that in order to look comfortable, practice the speech with a microphone in front of a mirror and choreograph your gestures. It also helps to use note cards rather than a fully written speech and mark parts of the speech than can be eliminated if time runs out.
How to reach: Toastmasters International, (800) 9WE-SPEAK or www.toastmasters.org
Unfortunately, he's not in the office often enough to enjoy them.
Mueller gained national, as well as local attention in 1997 as Ernst & Young's regional Entrepreneur Of The Year in Communications. And after selling his business to FutureNext Consulting, Mueller expected a well-deserved rest and time with his newborn. What he got was an enticing proposition from the newly elected Mayor of Cleveland, Jane Campbell.
Mueller says it wasn't so much the challenge of heading up the Department of Development that interested him, it was the meeting with Campbell and the meeting of minds that pulled him out of retirement. Even now, he talks about how, by the end of his initial meeting with Campbell, they were finishing each other's sentences.
But Mueller knew it would be tough. Vantage One was based in Cleveland, so he was familiar with the red tape of City Hall. What he didn't know was how deeply entrenched the bureaucracy was and how difficult changing attitudes would be.
Mueller sat down with SBN Magazine to talk about his first year in office and what Cleveland can expect from his soon-to-be-released strategic plan.
Are you a displaced businessperson at City Hall, or is being development officer what you expected?
Some days yes and some days no. It's been extremely gratifying to come in and do something for the community. Someone recently said to me, "You spent the first 20 of your years in business being successful, now you're doing something that's significant."
I think that person was right. As much as I feel proud of creating new jobs as an entrepreneur and being on the edge of technology, there is some great significance to this job. I get reminded of that every time I see a new business open up.
We just did the ribbon cutting at Market 25. It's a brand new retailer across from the West Side Market. It's extremely gratifying knowing that some of the monies you had to dole out were done responsibly.
I say no for the days that are just truly frustrating by the speed at which things move oftentimes. In the mid-sized business I had, as well as a couple of other companies I started, you make a decision in the morning, and by afternoon, it's already in gear.
Here, there are just so many different stakeholders that you have to get buy-in from to get things moving. It's tough.
Did the mayor approach you, or vice versa?
I got a call from the mayor saying we had mutual friends who knew I was interested in public service. After I sold the business, I was going to take a couple years off and just exhale.
I came away from 10 very fast-paced years of running six and seven days a week, sometimes 16-hour days. I was just exhausted.
About nine months into it, I'm loving life, enjoying our first child, and I get a call from the mayor's office. I went to talk to her on New Year's Eve. By the end of the meeting, I knew I'd be coming out of retirement.
I had no political aspirations, now, even more so. I see how difficult elected public officials jobs and lives are. But being in the background and trying to get things done has been really gratifying.
How would you rate your first year in office?
I compare this year to making an acquisition in business -- you have to do due diligence before you can set down your master plan. And a good chunk of this year's been due diligence, understanding the current state before we say what the future state's going to be.
And I feel proud that, as we were doing this due diligence, we still were able to go after a Cisco and get ISG off the ground. We set the tone that this mayor is very friendly to technology companies, whether biotech or information technology.
This first year was also about instilling a sense of urgency within City Hall, changing some of the attitudes and perceptions of those who work here. I passed out clocks to all of my directors and commissioners. One even sits on the mayor's desk. These clocks show how many days are left in the term.
Sometimes people get caught up in a job they've been at for 15 to 20 years and lose a little bit of the urgency. When I first joined the administration, a lot of folks said, "You're here for a cup of coffee. I've been here for 10 years before you and I'll be here for 10 years after you. It doesn't matter what happens."
But it does. We know we only have a certain number of days left in this term to make any kind of difference. And thus far we've seen some really great results. Our citizens, corporate community and small business owners are our customers, and we're seeing our people becoming more customer focused.
How do you plan on making an entire administration customer focused?
It was my belief that people who walked into City Hall were not treated like customers. We did some ghost shopping, you know how retailers bring people in to shop to evaluate service? We did the same thing and we found people weren't respected like they should be -- they weren't treated like customers
When someone walks into City Hall for a building and housing permit or a certificate of occupancy permit or a low-interest loan, the process can take a while. We want to be able to hand these customers a road map that shows how their request goes through the City Hall bureaucracy. When you explain the process, the roadmap, there's a lot less frustration.
We've done several other things to move to a more service-oriented attitude, one of which is, we started a book club. Our directors are exchanging ideas from good business books like Built to Last by Jim Collins and the Sam Walton story about how to really bring customer service to the highest degree.
Also, we brought in Hal Becker, who wrote The One-Minute Manager, to do some motivational speeches with our building and housing staff. These people are on the front line with all of our customers, from the homeowners to the business owners.
Hal not only does inspirational speaking, he also talks about strategic ways of building better customer service and creating meaning to your job -- a significance and contribution to go after.
There are very smart, qualified people working in City Hall, and they're not doing it for the money. They're doing it because they really believe in public service.
But trickling down the line, not every one is customer-centric. That was the one thing I felt most critical about. I do see us shifting, but this is a multiyear project.
Is it possible to incorporate entrepreneurial business ideas into a public service position?
Mayor Campbell is entrepreneurial. There's a difference in being an entrepreneur, a business start-up person, and entrepreneurial.
Being entrepreneurial is taking new ideas and incorporating them into whatever you do. My job has been to propagate a lot of her ideas and mix them in with someone who's been an entrepreneur. It's a good collaborative effort.
When she hired me, she said my loose title would be entrepreneur in residence. She also said that along the way, I should always be the advocate for the businesses.
Is the idea of an integrated development officer new?
The idea of a development cluster is new. It's taking the existing economic development department and adding the community development department, as well as building and housing.
The cluster also incorporates city planning, which is how the land is used, as well as a vision for what the city could be. Then add in work force investment and the office of equal opportunity. And last, but not least, is the office of innovation and technology. Ironically enough, this was the position I first started talking to the mayor about taking on.
If you really look at it pragmatically, you'll understand that each is interdependent for each other's success. You'll never bring in companies and jobs unless you have the work force. You can never be able to bring people back into the city if you don't have good housing. You'll never be able to lure and recruit people back in unless there are jobs and housing.
Do you have a mentor in this new role?
There are people I looked to for best practices. During the first two weeks in office, I flew to Baltimore and met with my counterpart in Baltimore, Laurie Schwartz. She offered some ideas we hadn't tried.
We had a large group of public servants here from Philadelphia recently. They shared their best practices, and we took them around Cleveland to show them some of our successes.
Mayor Campbell and I have been to Chicago three times this year, meeting with Mayor Daley, talking about what we've done right and what they've done right. Mayor Guiliani has been in here twice to talk with us about homeland security and some of the things that he has done to clean up some of the boroughs of New York.
The mayor and I also are members of CEOs for Cities, a powerful group of representatives from 12 cities that meet regularly to discuss best practices and issues on subjects from technology to housing. It's an exciting thing to be part of.
What's your highest priority project?
I think holistically, the most important project is working on the strategic vision -- who we want to be as a city, and ultimately, as a region.
What can we expect in your strategic plan?
We've focused on four priorities -- jobs, safety, education and housing. The mayor stressed them during her campaign and going into the administration. But when you talk to the mayor of any major American city, whether it's Guiliani in New York, Daley in Chicago or O'Malley in Baltimore, they will all say jobs, education, safety and housing.
So how do we differentiate ourselves? That's the thing I think is one of the most important parts -- for us to show our vision.
It took the better part of this year to get our arms around City Hall, from the finances through the development projects and just the inner workings of how the system works. Coming out of this first year, we feel pretty confident in what our direction's going to be.
One goal that came out of an off-site strategic planning session in the development cluster was to be building 1,000 homes a year in the City of Cleveland by 2006. In 1999, we built 427 homes, and that was the largest number built in the city in almost 40 years.
To do that, we have to re-establish our relationships with the homebuilders and the banks that are going to finance the building. Look around the Clinic at the townhouses and homes built in the Huff and Fairfax area. The land is there.
So while our coffers may be money poor, we're land rich. And one of our single biggest goals is to achieve those 1,000 homes a year.
In 1950, we had close to 900,000 residents. Today, we have 470,000. When you have a city that can hold almost a million residents and it's down to about a half million, there's a lot of land to work with.
Our biggest challenge is how we respectfully and methodically get that land into the developer's hands. That's where we've had our biggest challenge. It's really important for us to repopulate the city.
So what comes first -- the residents, the jobs or the housing?
First you start with job force training. Within the development, we've got Workforce Investment Act money. We get about $17 million a year from the state of Ohio to invest in retraining our citizens for the jobs of the future.
So whether it's working with robotics or some kind of computer-based manufacturing or in the life sciences doing biotech training, we've got the money to go after and retrain people to where the jobs are. Once people are trained, it's like a balancing act -- you're out courting companies to come in and use Cleveland as a home.
There are a couple of things I think we've done extremely well. One was, we made a bet on ISG to take over the LTV steel-making plant. There are people all over the country that dismissed that as a very poor investment on our part. But we, as a stakeholder for the city of Cleveland, sunk millions of dollars into their renaissance or reinvention, and now they're turning a profit.
ISG got almost 900 people back to work, many of whom are Cleveland residents, and now they're looking to make acquisitions. They may buy Bethlehem Steel if the numbers work out, and there's a steel servicing company that may relocate next to them and that'll be another 100 jobs.
So systemically, we think that was a good bet for us, that things will move off of that and create more jobs for transportation, for accounting, for legal, and whoever else has some touch point with the steel side.
The second one we're really proud of Cisco Food Services. For all too long we've been reading headlines that say 500 to 600 jobs are leaving the city. Cisco is bringing in 600 jobs to the city. That's a $30 million payroll coming into Cleveland -- that's the largest in 35 years.
During the next 16 months, Cisco will be building their new facility, and we could probably double the number of jobs to come in because of their trading partners that normally locate people next a Cisco facility.
Do you have specific plans for the downtown area, the heart of Cleveland?
We're putting together a tax incremental financing packing for lower Euclid, a TIF. It would take many of the taxes generated with the retail into this area and plow it back into incentives for builders to come in. We see Euclid as our main street, and a city is not complete unless its main street is healthy and alive.
Particularly, East 4th and Euclid has seen its share of blight. The Cleveland that we knew growing up, where you'd walk from Higbee's to Halle's and May Co. and all the shops in between, there's no remnant of that left.
What the White administration did that was brilliant was consolidate over 30 different building owners between Public Square and Ninth Street into four building owners. You could never get 30 building owners to agree on a vision, but we have four building owners that agree on the same things -- put in retail, restaurants, entertainment along East 4th and Euclid, and have housing above.
We're also considering what other major projects would be good for our downtown area. The answers aren't out there yet. Could it be a convention center? Could it be the lakefront development? Reclaiming our lakefront?
Quality of life is important when you're trying to recruit and retain young minds in the city. People compare us to Austin, Chicago and other major cities. Improving the quality of life can include things like having lakefront access, maybe bike trails that connect various regions to the lake.
What's more important, lakefront development or downtown development?
There's no doubt that downtown development of our main street and improving our vacancy rates is critical to Cleveland's success. We also know that successful cities are the ones that have guarded or reclaimed their lakefront.
Chicago's got 30 contiguous miles of lakefront access, from Gary, Ind., all the way north. That's a prime reason people want to live in Chicago.
We don't have that type of access. We've got Edgewater Beach and Gordon Park and the Rock & Roll Hall of Fame. That's about it for getting to the lakefront.
I think the answer lies in having a balance of both downtown and the lakefront.
What's the current status of the Mid-town Tech Center?
One of the top priorities of our administration is making funds available for incubator start-up companies for the tech center. We're leveraging Empowerment Zone money for that purpose, as well as creating tax incentives for incoming businesses.
Our focus, though, is growing those companies that are already here, not going outside the region to lure them into going downtown. We've got a standing, loose agreement with the inner ring suburbs of no more poaching.
We've been the one that's been poached more than anybody. But we're saying we'll not actively go after companies in the inner ring suburbs because it's a zero sum gain for the region.
This is a regional push. If a company comes to us and says, 'To be competitive, we need to be in the city of Cleveland,' then we'll talk to them. But we won't go after businesses in the region just to build downtown up.
Middle-market business leaders have often complained of not knowing what help and/or monies are available to them. Do you have a plan to rectify that?
I think that's a fair statement. As a former middle-market company owner, I didn't really see much come toward us, and we never applied for any kind of assistance, aide or abatements because we didn't know about them.
Knowing that our focus is not so much on attracting more Fortune 500 companies to Cleveland but targeting the Inc 500 businesses or the Fortune 1000 companies, we are adjusting some of our tax abatement programs and low-interest rate financing packages to appeal to the middle market.
I think you're going to see a great improvement in this area because the middle market and start-ups are the target market of the Campbell administration.
What type of industries are you trying to attract?
If you're five miles wide and only an inch thick, you're going after everything as opposed to being focused. The drawback there is you have some fairly big bets. The Campbell administration is not fond of making one or two big bets. We want to be able to go out and make several good bets, one of which is IT. Another is life science. The third is advanced materials like polymers and fuel cells. And the fourth, which we think very strongly about, is advanced manufacturing.
At ISG right now, they've got one of the most technologically advanced steel-making processes in the world that's marrying technology with old-line manufacturing.
We do a good job of making things in Cleveland, and when you infuse technology with that, then you have an emerging market in manufacturing. Instruments and controls is another bet we believe very strongly in, and we've got the companies to back it up.
When you look at IT, the 75,000 IT workers in this region create a critical mass. But you can also use IT as a tool for economic development by having a database you cull through in order to find prospective companies to come into Cleveland. We haven't done that. Most of what we do right now is answer the phone. But if you really use analytics and raw data, you can find the strengths of our region and match them with the strengths or needs of emerging companies.
I'm a huge fan of saying, 'When you wake up in the morning, you only have 100 units of energy to spend.' How you spend those 100 units of energy is the difference between success and mediocrity.
So if we go after a company that hasn't been well qualified and you hit a dead end, then you've used too many units of energy on that one lead that really wasn't a good bet.
Are there any other prospects you're courting?
There are prospects in the pipeline, but I can't really talk about them because it would give away our competitive edge on the packages we're going after. Suffice it to say, our economic development department is starting to sound like a sales force, with possibilities in the pipeline, leads, status reports on these different leads and a procedure to start proactively going after the companies.
What happens at the end of this term?
If we do our job, Mayor Campbell won't have much work to do during her campaign. It's really as simple as that because she has the trust of the people in the region. Evidence has shown that elected officials continue to do their job as long as people have that trust that things are getting done.
The first year had some results, and again, that was our due diligence. Over the next three years, we invite people to demand that things get done. We have continually had people moving out of the city, both businesses and residents, and we think we're close to stemming that tide.
Where will we be at the end of four years? When you look at our vision statement and you look at some of the specifics, like 1,000 homes a year, I think you'll see that we've put stretch goals out there that are tough to go after. And I also think you'll see that we're accomplishing those goals.
And I believe at the very end of those four years, you're going to see people with a continuing sense of urgency at City Hall.
Do you have any plans to run for office?
That's not even in the cards. I think I could be a lot more effective in this role than I would holding office because I get to cut through a little bit more of the muck than an elected official. I think people like the mayor need to surround themselves with people that don't have alternative agendas, like promoting themselves for a future office.
Mike Bitzer joined the family business when he graduated from college. Today, as a fourth generation owner of Bitzer Furniture in Painesville, he continues to build sales and customer loyalty with a philosophy established 85 years ago by his great-grandfather, Baldwin Bitzer.
Stressing just how little the business has changed over the years, Bitzer proudly claims, "We still have the exact same payment plan from 1915."
One-year interest-free financing is available, with payments made directly to the store. It's an old-fashioned service style that appeals to consumers as an alternative to high credit card interest rates. Bitzer says the company holds between 500 and 600 active accounts at any given time.
Unlike big box retailers who sell their accounts receivables, sacrificing a small percentage for immediate cash returns, the privately held firm owns its receivables, as well as the inventory and the building. While typical of businesses of the early 1900s, Bitzer's way of operating would be nearly impossible for a start-up business to duplicate in today's financial climate because it would be difficult to get a positive return on investment.
Payment practices are not the only relic from the past. Walking through the front door is like stepping back through time. From the well-worn wooden floors to the open-front cargo elevator, the store has not wandered far from its original design. Three floors display home furnishings under dim lights hanging from engraved cathedral ceilings.
But Bitzer recognizes that the $65.1 billion furniture market is highly competitive, and he needs more than the charm of a building from the late 1800s to bring customers through the door.
Bitzer's competes against numerous big name, high volume bedding and furniture stores within a 30-mile radius, including Ethan Allen, which features its own label and last year ranked second nationally in sales, Pier 1 Imports (fifth) and La-Z-Boy (sixth).
That doesn't mean there isn't space for a smaller independent retailer -- overall last year, the furniture market rose approximately 8 percent -- but how does the family-owned company survive, let alone compete against its larger and more well-funded neighbors?
Bitzer says it does it by ignoring both the high-end and low-end sales and creating a trusting relationship with customers.
"We position ourselves most squarely in the middle," he says, adding that he works with manufacturers such as Flexsteel, Smith Brothers, Peters-Revington and Crawford to maintain a strong reputation for quality.
The tricky part of the equation is creating a price structure to meet or be lower than comparable retailers. That helps draw customers in; service does the rest.
"My feeling is, if we do everything right, they'll (customers) come back," Bitzer says.
Doing it right begins with the low-key atmosphere, possible because the nine-person sales staff receives a salary instead of being paid on commission. That, says Bitzer, reduces competition among salespeople and allows them to focus on receiving high customer satisfaction marks instead of strictly on achieving high sales numbers.
Bitzer says high pressure tactics are not only uncomfortable for customers, they're uncomfortable for employees. He prefers to promote the store as a place to go and comfortably browse around.
While outside the industry norm, the practice has always been a company standard, as has a team approach to service.
"No one has a job description because everybody has multiple functions," says Bitzer, adding that that includes everything from dusting to correcting scratches to more extensive furniture repairs.
A majority of furniture is damaged in transit from the manufacturer or during the creation process. From open fabric seams to drawers that stick, today's furniture reflects the fact that 90 percent is still mainly man-made, with room for mistakes.
Bitzer says every piece of furniture is unpacked, checked and repaired prior to delivery to the customer. Every employee is trained in repair methods to minimize returns and maximize customer satisfaction.
There's another factor that's come into play in recent years, challenging Bitzer's ability to compete. The retail business in the heart of Lake County drew heavy traffic in the late 1970s when a discount department store took over half a city block. But by the late 1980s, the discount house was gone, and so were the downtown mall specialty stores.
Lake County Administrator Ken Gauntner recalls how the stores drew traffic in, and the tough economic blow the city suffered when they left. The multilevel New Market Mall was renamed Victoria Place, but an attempted revival in 1991 proved futile. Retail in Painesville began a steep decline, and today, fewer than a half dozen stores remain in the city limits.
With few other shops to bring in traffic, Bitzer relies on repeat sales and referrals from customers who come from Ashtabula, Geauga and Cuyahoga and Lake counties.
He says he'll continue to compete head-on for sales in the mid-range market, and he's not concerned with big box retailers. As long as he remains on the path his great-grandfather blazed, the store's service does not end with product delivery, it starts there. How to reach: Bitzer Furniture, (440) 354-4622
Deborah Garofalo (email@example.com) is an associate editor at SBN Magazine.