Morgan Lewis Jr.
But instead of waiting to be sold to another corporation, Blue Ridge employees, who manufacture paper drink cartons, joined with a New York investment banking firm to buy the company themselves, creating an Employee Stock Ownership Plan.
Without that corporate leadership, however, Blue Ridge was left with a new operating philosophy of employee ownership, something that not everyone at the manufacturer was prepared to tackle.
"We no longer had some of the deep pockets that we had under Champion as far as training and development is concerned," says Chuck Grotsky, Blue Ridge's manager of human resources and organizational development. "Being employee-owned, running quite lean, we needed to look around for other avenues of training and development activity and at the least expensive alternative we could find."
It also looked for somewhere to get training grants to help offset costs of management training that it had previously relied on Champion to deliver.
One of the places Grotsky turned to for help was Lorain County Community College's EnterpriseOhio's SkillsMax Center, which provides assessment, training and certification tools to help employers better place and manage employees. Blue Ridge's main concern, however, was learning to instill a sense of ownership into its 155 workers.
"We wanted to provide some training for our supervisors and managers on, first of all, how to deal more effectively with change, and how to manage more appropriately in a participative employee-owner type of environment," Grotsky says. "That's part of the reason some of the classes were selected, because we want our supervisors to function less traditionally -- [less] the old managing, directing, controlling-type activity -- and become more a mentor-coaching type activity, and be a lot more participative, involved process."
After a training needs assessment and interviews with supervisors and managers, LCCC offered Blue Ridge the "Frontline Leadership" program, which includes 13 modules of classes in topics such as developing job skills, taking corrective action, resolving team conflicts, managing change, interest-based problem solving, managing individual performance, managing team performance and managing change.
Classes were paid for primarily through training grants Blue Ridge and LCCC landed from the state of Ohio.
"We're not quite there yet," says Grotsky. "We're not yet to self-directed work teams, but we want to try and get our people more involved as employee-owners, and that requires doing things differently than you would in a traditional management environment."
Also assisting with Blue Ridge's transition are the Ohio Employee Ownership Center at Kent State University and the Federal Mediation and Conciliation Service.
"There are a lot of training initiatives ongoing," Grotsky says. "It's a slow process. This facility has been around since the late 1940s, and some of our people have been here 30 to 40 years, but we're beginning to see some progress." How to reach: Blue Ridge Printing, (440) 235-7200; Lorain County Community College, (800) 995-LCCC
Every business was affected by the events on Sept. 11. Business as usual did not resume the next day, or the day after that. Perhaps it never will.
Business leaders re-evaluated their company's missions. It wasn't just words now. Employees reconsidered their companies, and what was really important about their jobs. Profits, growth and market share suddenly seemed trivial. Family, friends and people were the top priority.
But the strength of this country is that its businesses, and the people who run them, will always move forward. To progress. To innovate. That spirit has built the United States into the most economically robust country in the world. It is the entrepreneurial spirit.
It is that spirit that Ernst & Young honors with its Entrepreneur Of The Year Award. Quite possibly, this year the award means more than ever.
"What always seems to amaze us every year is you always wonder, 'Where will the new entrepreneurs come from?'" says C. Lee Thomas, partner-in-charge of entrepreneurial services for Northeast Ohio for Ernst & Young LLP. "Particularly with the economy this year and with 9-11 all factored in, we continue to see some strong entrepreneurs and some great winners."
Even with the subsequent recession, Northeast Ohio showed its resilience. About 70 companies were nominated for this year's award, almost identical to the region's number last year.
"Nationally, our nominations have been down," Thomas says. "But in Northeast Ohio, we've held up well with a consistent amount of nominations. That's a real positive trend here."
It would be impossible to honor these entrepreneurs and their achievements while ignoring the events of this past year. Everything has changed.
Instead, let us honor these entrepreneurs, not only for their business skills but for their pursuit of the dream that is the bedrock of the United States of America. How to reach: Ernst & Young, (216) 861-5000
Luckily for Tom Nesbitt, president of United Glass & Panel Systems, his company is prepared to serve both markets.
United Glass designs, engineers, manufacturers and installs glass and panel systems for new construction, and in the past has followed up with service and maintenance on its work. Thanks to that demand, last year Nesbitt launched the service arm of his business as a separate division.
"Besides creating a more complete offering for our customers, this also makes great business sense for our company by providing a balanced income stream," Nesbitt says.
The service work, in addition to the new construction projects United landed last year -- including Malone College's science building, Mount Union Library and the Millennium Building -- helped the company boost sales by 30 percent over the previous year.
This enormous growth required the company to expand from its 8,000-square-foot facility to a 25,000-square-foot headquarters in North Canton.
"We have been very fortunate that the greatest adversity we faced was keeping up with our own growth," Nesbitt says. How to reach: United Glass & Panel Systems, (330) 433-9220
At Disney's Wilderness Lodge in Florida, employees, which Disney calls "Cast Members" were asked how to improve food service for guests at the Whispering Canyon Cafe. Servers and entertainers, who dress as Old West characters, suggested wooden horse rides for parents and children, and cap gun fights with servers while guests waited for their food.
Employees also recommended that the cooks serve the food, so if a server was in the middle of entertaining a guest they wouldn't have to run to the kitchen to pick up the order. As a result, children were entertained while the orders were prepared and attendance increased at the restaurant.
"Because involvement was the key, the cast member buy-in was much higher," says Joel Strack, a facilitator for the Disney Institute's "Keys to Excellence" leadership program, which recently visited Cleveland for the Greater Cleveland Growth Association's COSE Small Business Week. "Transfer power and decision-making authority to employees and they will have a greater sense of ownership."
The employee ideas were not all fun and games. Resort housekeepers asked their managers if they could replace their carts, which were too heavy for some employees, with motorized models. The new carts paid for themselves in months due to the decrease in housekeeper injuries and downtime.
To increase involvement, employees must trust their leaders. So if an employee suggestion cannot be used, you must tell the employee specifically why it's not feasible, says Strack.
"If employees don't trust their leaders, they won't want the ownership because they don't want the blame if something goes wrong," he says. "They have to feel like they've been heard and you're listening."
How to reach: Disney Institute Keys to Excellence, (407) 566-2650.
"At first, I thought when I'm 70 years old and have my gold watch from Key, this would be the perfect job," Stark says sitting at a sprawling dark wood conference table inside of B-W's Kamm Hall. "But the more I learned about the job, the more I realized that this is the perfect job for me, so why am I waiting?"
Officially, Stark took a leave of absence from Key to take the Herzog Chair, which puts her in esteemed company at the bank. "Henry Meyer is the only other person at Key who left on leave of absence," she says. "He came back, but I'm not."
Stark will be busy with the fall 2002 launch of B-W's new MBA in Entrepreneurship program, which she helped design with Northeast Ohio business leaders and entrepreneurs. The program is designed to introduce those who want to own their own business to the realities and challenges they will face. She says will also help executives who have been working in a corporate culture to think like an entrepreneur.
"Entrepreneurship is a process," she says. "One of the first things we do in the program is shatter some of the myths of entrepreneurship. One myth is successful entrepreneurs are high risk takers; that's not true. They are moderate, calculated risk takers. We can teach them to assess an opportunity from a critical perspective."
Stark's time at KeyBank was the ideal preparation to design such a curriculum. In her time lending to small business owners and entrepreneurs, she knows why businesses succeed and fail. Mostly, she says, even great business plans fall apart because of poor management.
"What I saw was most business failures could be avoided," Stark says. "It's simply because of lack of knowledge and competencies on behalf of the entrepreneur. It's not that they had a bad business idea."
Stark previewed the program to CEOs of large corporations, like The Sherwin-Williams Co., to see if they would be concerned that if one of their employees enrolled in the program they would soon leave to start their own business. The CEO reaction was overwhelmingly supportive, she says.
"The people who can see change as an opportunity, do more with less, and instigate change, are the kinds of people they want in their company," Stark says of the corporate leaders. "So our approach is not so much new venture creation as it is the entrepreneurial process."
How to reach: Baldwin-Wallace, (440) 826-2196.
"I didn't know even how to switch on a computer," says Singh. "It was very hard in the beginning, but I would always push myself to learn, and find the people to help me learn and grow my business."
For the last 14 years, that learning has come through attending countless seminars, trade shows and conferences, and by joining civic and trade organizations. Through hours of networking and volunteer work, Singh helped make a name for herself and her firm in the region.
It laid a foundation that would save Singh's business through the lean early years, and later help it grow to the next level.
A native of New Delhi, India, Singh's learning curve is impressive. She arrived in Cleveland in 1979, shortly after earning a master's degree in English literature in India.
She had no business experience when she arrived in America, but she was determined to launch a consulting business with her husband, Nipendra, who, at the time, was a general manager at TRW.
In just two years, she earned her accounting degree from Cleveland State University, and passed the CPA exam on the second try, all while raising two daughters.
"I don't think they stayed with a babysitter more than a couple of times," Singh says. "One of us would be with them. But again, most of the studying I did was when they would be asleep. All the exams I used to do when they would go to bed. Those years, having no business experience, I had to make up for that. I took some courses at Lakeland.
"For the CPA, I took a review course, and then sat for the exam in Cleveland."
Starting S&A Consulting out of her basement, Singh worked 18 to 20 hours a day, eventually raising enough capital to share a 1,400-square-foot office in Lyndhurst with another company. Months later, the other company folded, leaving the Singhs with a seven-year lease, $2,000 a month rent and 100 percent of the office expenses.
"One day he just told us, 'I can't afford to be in this office anymore,'" Singh recalls. "It was just two of us. We were still trying to get our company moving."
The Singhs had to drain their daughters' college savings accounts and their own savings to keep the business running. But thanks to Singh's persistence, clients started to arrive.
She owes much of the success to her education through business events and to meeting the right people at the right times, both in business and local politics. The awards and citations that line the walls of her Chagrin Boulevard office are evidence of her networking.
"I think we are a member of almost every chamber here in Northeast Ohio," Singh says. "I'm a very active member of COSE. I have been a member of the board of trustees almost 11 years now. I'm the first Asian-American woman to be on the board of trustees.
"We also belong to different professional organizations: Ohio Society of CPAs, Women's City Club. You can't be active in every one of them, but you can be selective about which ones you join."
The hours of volunteer work and business networking take away from time spent solving the day-to-day problems in the office. Singh says she has to trust her 20 full-time employees, as well as the 100-plus consultants she has on contract, to make more of the decisions.
"Obviously, I chose to do this instead of being in my office," Singh says. "But it helps you, because where else would you get 100 businesses in one room, sharing information and getting information. One thing that really helps us when we are outside in an environment, we learn what are the needs of our clients. You learn about what is really important.
"It takes a lot of time but it's worth it."
S&A's client list boasts international names like 3M, Mitsubishi Materials, Fuji and Pratt & Whitney Aircraft. Nipendra Singh, who travels at least three weeks out of the month, manages these international clients.
Locally, Rita Singh advises civic clients, including the city of Cleveland's water and parking departments, as well as the Cuyahoga Metropolitan Housing Authority.
"Our client base is small, but that's the way we would like it," Singh says. "I would rather have 100 stable companies as our clients than 500 bankrupt companies, and that's where I'm focusing. I would rather be small and strong."
In February 2002, the Singhs moved to larger offices in Signature Square in Beachwood.
"I reimbursed my daughters' entire college fund," she says. "My daughters, they have been part of this business, they have done so much. I don't think I could still manage to do the volunteer work, run the business, social life and still be a super housewife without their help."
After this year's tax season is over, the Singhs will have more time to plan the expansion of their company.
"We're not going to be opening too many offices because these days, with technology, you can have one corporate office and you can do business all over the world," Singh says. "We are planning to open an office in Columbus. When you're in Ohio, we need that presence in Columbus. We plan to acquire smaller to medium-sized accounting and consulting practices." How to reach: S&A Consulting Group LLP, (216) 593-0050 or www.sa-consultinggroup.com
It had rained all week, but it didn't seem to affect voter turnout. On the contrary, according to CNN, some Atlanta voters "waited an hour and 20 minutes to cast their ballots, standing in lines that stretched out the door of their polling place. Officials said they had never seen such a high voter turnout."
The rain in Georgia, however, was nothing compared to the two-month-long storm that would fall squarely on the state of Florida the next day, in the counties of Miami-Dade, Nassau and Palm Beach. The voting results there would be a catastrophe.
In the weeks that followed, we became familiar with terms like pregnant chad, butterfly ballot and, especially, undervotes, in which the voting machine detects no vote for the candidate. At most, 170,000 Florida ballots were in dispute for the president, while some pointed to as few as 9,000. It was the closest election in U.S. history.
Eventually, the U.S. Supreme Court ruled against Democratic presidential candidate and then-Vice President Al Gore, who appealed to the court for more time for a recount certification. And so, more than one month after the general election, Texas Gov. George W. Bush became president of the United States.
As the rain was ending about 660 miles north, Georgia Secretary of State Cathy Cox nervously watched the battle in Florida. On a gut feeling, Cox asked her staff to calculate the number of undervotes in her state.
The result was astounding. In the 159 Georgia counties, there were 94,000 undervotes for U.S. president, more than in the state of Florida and twice that of the national average. With another election only months away, Georgia's voting systems, many of which were the same punch-card ballots used in Florida, needed an overhaul.
"'I don't want to see my face on Saturday Night Live,'" Cox reportedly told her staff, according to Georgia Director of Election Administration Kathy Rogers, who presided over the project with Cox. "So she put together a 21st Century Voting Commission. That commission went forward to different locations and checked out different systems.
"We unanimously decided that we needed to adopt a uniform Direct Record Electronic (touch-screen) voting system."
Flash-forward six months to June 2001. A company known primarily for its ATM machines, Canton-based Diebold Inc., acquires Texas-based Global Election Systems for $26 million, according to published reports.
Global manufactures AccuVote (optical scan) and AccuVote-TS (touch screen) voting machines, and already has contracts in more than 850 jurisdictions in North America, including Georgia and Maryland.
"This action will complement our existing core competencies in self-service technology and security," said Walden O'Dell, Diebold chairman, president and CEO at the time of the acquisition in a statement from the company. "Global is an industry leader with excellent voting solutions, and provides Diebold with considerable expertise and knowledge of the U.S. election solutions market."
Still, the move seemed wasteful for Diebold when its Brazilian subsidiary, Procomp, already supplied the world's largest voting system, used by 109 million voters during elections held throughout Brazil. Those elections included more than 180,000 voting terminals, accessories, software, installation, training, logistics and support.
But getting Procomp's machines to American voters would prove to be a heavily bureaucratic and time-consuming project, and with voting machine mania sweeping the nation in 2001, time was not a luxury Diebold could afford.
"This acquisition allows us to immediately capitalize on this expanding market rather than undergo the lengthy certification and development process necessary to enter the market with our Brazilian product," O'Dell said. "We expect the U.S. voting marketplace to generate $1.5 (billion)to $2 billion in hardware revenue during the next four to five years."
Georgia's Cox moved quickly to modernize and standardize balloting in her state. Shortly after the voting committee's recommendation, Diebold was among numerous companies which submitted Request For Proposals to win the $54 million contract.
None of the other companies even came close to Diebold, according to state and industry officials.
"Diebold offered a complete turnkey system to the counties," Rogers says. "They offered experience. They said they could do it in a year. Not every vendor who responded said they could do it in that timetable.
"They could meet the sheer magnitude of units we needed. They had attention to quality control. They came in right on the money, and just won hands-down."
In six months, Diebold deployed more than 22,000 voting terminals to more than 2,900 precincts in 159 counties. The project required 500 employees to help with logistics, training and support.
"Only Diebold could've completed that order in that timeframe," says Mark Radke, Diebold Election Systems Director of Voting Industry. "Since we have our own manufacturing facilities, it allowed us to ramp up our manufacturing and add lines to complete that project."
The first Georgia election with Diebold's machines was a primary on Aug. 18, 2002, in Hall County, 60 miles north of Atlanta, and Marion County, 100 miles south of Atlanta. Fewer than than 20,000 voters would decide if the state had wasted $54 million.
"We chose those two particular counties because the systems they had were truly just junk," Rogers says. "They couldn't paste them together with glue, and they just begged us for the new machines, so that gave us an opportunity to have a test site."
The test run was a success.
Hall and Marion county voters were pleased with the change, as were voting officials. The only glitch occurred when some election managers plugged in the machines incorrectly, according to The Repository in Canton. But the error didn't affect elections, thanks to the terminal's battery backup.
"It went really well," says Rogers. "Voters just loved the doggone things, and we knew they would."
When the touch-screen terminals were rolled out for the statewide election in November, the response was equally as enthusiastic, according to exit polls. The Atlanta Journal-Constitution reported a 97 percent voter approval rate, according to a survey it conducted after the elections, and it gave a rare endorsement to Cox and Diebold on its editorial page the following day.
Although Diebold won the Georgia contract handily and recently closed a major $30 million contract with San Diego County in California, it's not alone in the voting system marketplace.
Two other companies, Sequoia Voting Systems and Election Systems and Software, share roughly an equal portion of the growing market. It's a market that's sure to intensify, with $3.9 billion in federal funding on the way from the Help America Vote Act, signed by President Bush in October last year to help states update their systems.
"It's pretty clear the direction that the states, counties, precincts want to take this voting, and it's more toward electronic or optical-based systems as opposed to paper-based systems," says Matt Summerville, an industry analyst with McDonald Investments Inc. "Diebold has garnered themselves a very decent share in the marketplace with the acquisition of Global. They're one of the top-tier players, but this is a market that is going to be very competitive."
Summerville adds that if it weren't for the botched elections in November 2000, Diebold wouldn't be in the dominant position it is now. But, he says, the company responded well to the crisis.
"I feel great about our position in voting," O'Dell told investors during Diebold's year-end conference call. "The company we acquired was $9 (million) or $10 million in 2001, and third in market share. We went from third to first in a year. Then, all of our equipment and all of our support performed perfectly on Election Day, and that propelled us forward with a great opportunity to continue to lead the industry and gain more share in that market."
Creating consistent sales of voting systems will be a challenge for the company, Summerville says. The size of the contracts will cause large revenue spikes, then dips, which could scare off some investors.
"If they get L.A. County this year, that could be $100 million in and of itself, so it's going to be fairly lumpy," Summerville says. "The state of Georgia was $54 million in 2002 to Diebold, but that's not a repeatable business. About $50 million of that was hardware, with the remainder a flat-out service agreement. The service component is so much less.
"So you don't have right away the magnitude of recurring revenue streams."
It's strange that it took states and counties this long to get to this point, when, since the early 1980s, people have used Automatic Teller Machine to manage their finances.
Why did it take the most fiercely debated and mishandled presidential election in U.S. history for officials take action?
"That's a good question," Radke says. "The market has been waiting for a technology leader like Diebold to step into it to take it to that next step, both from a security standpoint, a reliability standpoint and from a support standpoint."
Diebold's Election Systems division contributed $111 million to the $1.9 billion company in 2002, but Diebold predicts the division will continue to remain strong, with growth of 15 percent to 30 percent this year.
In his year-end report to investors, O'Dell said that Diebold is in the running for more voting contracts in Maryland, California and Ohio in the coming years.
"Do I see this as an industry that is going to grow significantly over the next three, four, five years? My answer is yes, I strongly believe that," Summerville says. "One of things that we have now that we didn't have a year ago is federal funding in place and available for states and counties to go after." How to reach: Diebold Inc. (330) 490-4000.
That's why it's crucial for these manufacturers to update customers on every phase of a project, from the design drawings until the last screw is fastened.
Many custom manufacturers in the emerging global marketplace face the challenge of a time difference between their office and the customer's. It's difficult to give a project progress report to your overseas customers when you're at home asleep.
For Akron-based ACC Automation Co. and its overseas customers, the Web has emerged as an invaluable communication tool to help bridge the time divide.
ACC, which in some years has as much as 50 percent of its customer base from Europe, Asia, and Africa, builds custom dip-molding and dip-coating machines. The manufacturer keeps its international and domestic customers updated on projects on a private client report extranet site, where they sign in and view the scheduling progress, cost status, percentage completion and progress photographs.
ACC Automation's machines can take anywhere from eight to 10 weeks to one year to build, so to backtrack on a project would be costly.
"Those big projects really need to be stayed on top of very closely on both ends," says ACC Automation Co. President William Howe. "Communication is key to project management."
Improved project management is one of the main reasons ACC launched its client report extranet, Howe says.
"The turning point for us was our project management was not where it needed to be," Howe says. "Because we're a custom manufacturer, we have to look at everything from a project management side of things, and it just wasn't clicking. This was a tool that helped us get more efficient in that field."
Formalizing the manufacturing procedure for the Web site focused employees on the process and improved project organization and productivity, Howe says.
"The side benefit we never expected is that the site has been a sales enhancement as much as a manufacturing benefit," Howe says. "Potential customers are impressed by the site and like the fact that they won't have to travel as much to monitor the progress." How to reach: ACC Automation Co., (330) 762-9188.
If having a back-up power source sounds like a luxury, consider this: Can you afford to have your production line shutdown for hours while you wait for the electric company to get the power back on?
While you may have data back-up for your computers and servers, chances are good data will be lost during a power outage or surge. And consider the time spent trying to retrieve that data once the power comes back on.
That's when most companies call Robert Morog, president of LTI Power Inc. in Elyria. It's usually after a business has lost thousands of dollars in data or lost productivity during a power outage or surge that it calls him for one of his Uninterruptible Power Supply (UPS) systems.
Many of his clients are involved in emergency services businesses -- police and fire departments, hospitals and military bases -- and clients include the New York Transit System, Bank of America, NASA and the Dallas-Fort Worth International Airport.
"They would lose a quarter of a million dollars every three minutes their reservation system is down," Morog says. "People call a UPS system an insurance policy."
A UPS system, if linked with a gas-operated generator, can run your office or factory's critical systems, including computers, phones and alarm systems, for days during a power outage.
Moreover, when the power goes out, machines hooked up to the UPS system don't notice a difference, Morog says. The system's battery power takes over instantly.
"A generator alone usually takes at least a half-hour to get going," Morog says. "A lot of businesses can't wait that long."
UPS systems work as a power filter even when the electricity is on, so machines receive a steady current without spikes or dips, Morog says. That's why during an outage, the UPS system can take the variable power from a gas generator and even it out.
"Spikes and surges damage your equipment," Morog says. "It might not fail today, but if it's been hit pretty hard and it's weakened, maybe the next surge will take it out." How to reach: LTI Power Systems Inc. (440) 327-5050.
"We help people on a daily basis," Habeeb says. "We're dealing with the largest investment of their life, and most often, we're helping them achieve the American Dream, which is home ownership."
If it's not a first home, United Mortgage refinances a homeowner's current loan.
"We help people across the board," Habeeb says. "That's why my people are so apt to step up to the plate and give, because they're giving on a daily basis."
That attitude is a far cry from what some would assume to be the sales culture of a mortgage office, where everyone would be more concerned with commissions than communities.
"Obviously, we're all paid as individuals, but it's a group setting, and it's a team effort and a total team concept," he says. "It's the same way in community service; it's everybody lending a helping hand. The whole group did it, and that carries right on through."
United Mortgage's community service efforts are employee-driven. This year, 40 employees renovated, did yard work and cleaned the home of an elderly Akron woman who lived alone and couldn't perform the tasks. Employees have also come to Habeeb with ideas like hosting a golf outing to support the Susan B. Komen Breast Cancer Foundation and donating room air conditioners for a grade school.
"My employees know they can walk into my office at any given time, bring up the charity they want to support, for whatever reason," Habeeb says. "If I feel good about it, and most of the time I do because everybody brings great ideas, I open it up to the whole group to support it."
During the colder months, Habeeb takes employees to the steps of St. Malachi's Church on West 25th Street in Cleveland, where a number of homeless people sleep.
"We'll bring them blankets, a sandwich and coffee, and buy some coats," Habeeb says. "Instead of giving your money and wondering whether a certain percentage is going to go to administrative costs, we jump right into the heart of things and see it happen." How to reach: United Mortgage Group, (440) 260-2392.