Joan Wall

Monday, 22 July 2002 09:56

How to clone your best workers

Three years ago, John Moser, who handles human resources for Hilliard-based Micro Electronics Inc. and its Micro Center stores, didn’t have much in the way of job descriptions to give employees, who number 2,200 among 15 stores from coast to coast.

“We had what I would call the vanilla variety or generic variety like many organizations do. They met the requirements of a job description in terms of duties and responsibilities, but they weren’t in-depth as far as specific tasks the person would perform in that job,” he says.

Moser injected more life into those descriptions, as well as employee performance appraisals, by seeking the expertise of his own best workers. It was a strategy he learned through The Ohio State University’s Center on Education and Training for Employment and a process called DACUM, Developing a Curriculum, from Robert Norton, a professor there.

Moser now has detailed descriptions for 30 positions in the Micro Center retail division, including cashiers, service technicians, sales staff, managers and supervisors. He also has a better way to train and evaluate employees.

“We can be much fairer. We can be much more specific in giving feedback to our employees and in defining expectations we have for new people,” Moser says. “Many companies bring on, say, an administrative assistant [and] the next question is, ‘What’s that? What do I do?’ This takes away all that ambiguity.”


Cream of the crop

DACUM starts by drawing on the expertise a company already has: its best workers.

“If you want workers to be successful, it’s important to learn what successful workers are doing,” explains Norton, who has helped businesses use the DACUM process for more than 20 years.

Companies find five to 12 top-notch workers in the same position and ask them to analyze their own job duties through a series of steps, guided by a facilitator who has no experience in that position. For example, Moser gathered his five or six best warehouse supervisors to participate.

“Reactions by the people were very favorable, because they were recognized as being the experts in their job,” he says.

The group spends two days formulating the job description as follows:

  • “We start with a blank wall,” Norton says, explaining that participants use open-ended brainstorming to list their duties. “It’s a scattergun approach as opposed to a rifle approach.”

  • Next, the group decides what specific tasks are relevant to each duty. For example, one duty of a homeowner might be to maintain the lawn, while tasks would include mowing the grass and watering flowers.

  • Members also brainstorm the required knowledge, skills, behaviors, tools and future trends related to their positions.

  • They then review and refine job tasks, making sure each is precise. If one task is to record data, they determine what type of data.

  • Tasks are also put in a sequence, or the most likely order of completion. “Don’t put the most important one first; it’s work flow — the normal sequence of performing that duty and task,” Norton says.

Moser says a key to the success of DACUM is selecting the right facilitator.

“This goes beyond just simple organization skills,” he says. “It really is a rather intense effort to facilitate this process, because you’ve got five or six people interacting with you all the time with basically a blank piece of paper.”


A process for change

Norton has facilitated or taught the DACUM process, which costs approximately $2,000 per workshop plus expenses for facilitators, at other local and national companies including AEP, Techneglas, Ross Labs, Motorola Inc., Eastman Kodak, United Airlines and Coors Inc. Using the process, managers can evaluate what’s required for a promotion or lateral move within the business.

“Many companies use this for pay implications and certifying competency,” Norton adds.

Higher education facilities including Columbus Public Schools and The Ohio State University use DACUM for curriculum development.

Micro Electronics plans to continue using DACUM in other divisions, so Moser became a facilitator. For $995, he spent a week learning the process from Norton.

“Then it’s just the cost of getting the people together for a couple, three days,” Moser says. “If they’re local, that probably isn’t much cost. For an organization that is centrally based, that has the majority of its employees under one roof, it’d be minimal cost — basically just the cost of the leader training and then their time.”

The investment, he points out, was worthwhile for Micro Electronics, especially when it comes to having such detailed job descriptions — and a way to better evaluate employees.

“One thing we can say is that people are accustomed now to specific job feedback as opposed to a generic evaluation,” he says. “The more specific that can be, it can only help to improve their job performance.”


For more information, contact Robert Norton, DACUM program director, Center on Education and Training for Employment, The Ohio State University, at 292-8481 or visit www.interlynx.net/archway/ohio/DACUM.htm.

Monday, 22 July 2002 09:56

Down, but not out

Shadowbox Cabaret owners had their hands full planning to open a second venue at Easton next month. Now they’re also faced with starting their original business anew – without delaying the expansion plans.

The theater group lost $24,000 in property and its only revenue source March 1 when fire struck the Spring Street building that’s been its home for more than four of the organization’s five years in business.

But rather than simply wait to collect the insurance money and rebuild, the nonprofit group has decided to follow the classic Broadway adage: The show must go on. And so it has.

“We were back at work at 4:30 the morning of the fire,” says Shadowbox President Steve Guyer, noting that the drive, determination and perseverance of the company’s performers and employees has been one powerful element in efforts to keep things going.

“We have knocked ourselves out to not merely provide a service, but to establish mutually beneficial relationships with everybody we meet in this community,” he says. “They’re turning right around and giving back to us.”

On March 2, Shadowbox opened a fund to handle donations and pledges, now topping $16,000, that came in from loyal supporters as soon as word of the fire spread.

“That fund has really grown, not by us spending energy soliciting; that’s people that have written us a letter and said, ‘I can’t believe it. I hope this helps,’” he says.

Those donations – paired with a $60,000 liquid reserve Guyer maintained for emergencies and for research and development — have allowed Shadowbox to continue making payroll for his 37 performer/employees and partners and pull together some off-site performances to raise additional money to help pay bills and recoup losses.

A one-night performance in early April raised more than $20,000, plus $3,000 thanks to a special donation from the Columbus Crew. The company kept expenses to less than $500 for the show because food, space, audio equipment and help were donated.

Shadowbox is also keeping expenses down by taking advantage of supporters’ offers of free or cut-rate office space and equipment. Guyer went to suppliers and explained the situation, obtaining some slack on bill payments.

This month, the group will begin another quest for income – an anticipated $32,000 – beginning May 5 with performances at the Riffe Center, which also is giving Shadowbox reduced rental rates.

“In a typical month of operation at the Cabaret, we generate $50,000 to $60,000 in revenues,” Guyer says. “With the change in our operations, suddenly we don’t have a theater.”

While Shadowbox may be saving some money by not having the expense of regular performances, Guyer says it takes more than $35,000 a month to cover salaries and other bills required to keep the Cabaret in operation. Insurance has provided some payment, and Guyer hopes the total amount covered will be between $130,000 and $140,000. Shadowbox still awaits a ruling on a cause of the fire.

Meanwhile, the group continues recovery of its original company, which will be renamed 2 Co.’s, as in second company, once the Cabaret opens its Easton operation.

Guyer leaves open the possibility of returning to the Spring Street location as 2 Co.’s, but he’s also looking at other possibilities, hoping to remain downtown. If that’s not possible, the group will consider the Brewery, Arena and Short North areas as well, says Stacie Boord, the group’s public relations director.

“We want to be able to have two different performing outlets,” Boord says. “It’s our hope that in a couple of years, the downtown location will be rivaling the [new] Shadowbox Cabaret.”

How to contact : Shadowbox Cabaret, 706 New York Ave., Columbus, OH 43201; phone 424-9190

Monday, 22 July 2002 09:55

Todd Appelbaum

Todd Appelbaum’s “big picture” is summed up with one very small one. It makes up the face of his wristwatch.

There you’ll see his twin sons, Noah and Jacob, who turn 3 in August.

The prospect of raising twins and growing a business could be overwhelming to any entrepreneur, but Appelbaum and his wife, Michelle, who co-founded Cup o’ Joe coffee and dessert houses six years ago, don’t see it that way.

“They relieve all the stress,” Appelbaum says of his sons. “Kids are just pure innocence. They give you unconditional love. When I come home, they run to the door: ‘Daddy, Daddy, Daddy.’”

Appelbaum is raising his sons on the same premise his parents — who are heroes in his mind — reared him.

“Our philosophy,” he says, “is the greatest thing you can do for your children is give them a healthy ego. Treat them like they’re Super People — they can do anything. If you give them confidence and a belief in themselves, they can succeed in whatever they choose to succeed in.”

Philosophies play a major role in Appelbaum’s life. He’s got one for practically everything, from raising a family and running a multimillion dollar business to finding inner strength.

Don’t even get him started on the one about the Browns. A Cleveland native and staunch fan, Appelbaum rants over what he calls Art Modell’s “immoral action” of promising fans he’d never leave Cleveland.

Most of his philosophies, however, run much deeper.

There’s the one about success and how it comes from some struggle in life that gives a person greater drive.

Appelbaum’s life was most shaped, he says, during his first five years, when he had limited hearing. Surgery eventually restored his hearing, but he continued speech therapy until sixth grade.

“Because I was closed out to the world a lot because I couldn’t hear and had limited speech, that made me more aware of people,” he says. “I think I understand people better. I think I’m more observant because of that.”

Then there’s his business philosophy: “The upside will always take care of itself; it’s the downside you have to worry about.”

To avoid downturns, Appelbaum focuses on the details — a skill he learned while working for a deli/bakery when he was still in college.

“One day one of the owners came to me after an employee had thrown away a corner of corned beef,” Appelbaum says. “He took it out of the trash and showed it to me and said, ‘Here is where my profit is.’”

That kind of sharp attention to detail makes Appelbaum successful as a business owner, says Larry Schaffer, president of Townhomes Management Inc., who serves with Appelbaum on the board of First City Bank and previously did so at the Columbus Jewish Federation.

“He and his wife gave a great deal of thought on how the business should run before they opened up the first coffee shop. They looked at 250 coffee shops around the country to get ideas,” Schaffer says.

They’ve grown their business to four locations, 80 employees and $2.5 million in revenues since the company’s 1993 founding.

They have plans to open at least two to three more stores in Columbus in each of the next three years and are considering ideas including franchising and selling gift baskets by mail order.

Such success has allowed Appelbaum to follow through on one of his philosophies, reinforced for him by another of his heroes: Columbus philanthropist and businessman Mel Schottenstein.

“I think anybody successful in their own right, we have an obligation to give back to our community,” Appelbaum says. “We have a corporate policy to never turn down a charitable contribution.”

To that end, Cup o’ Joe gives in-kind donations to health, human rights and religious organizations about 100 times a year, he says.

Appelbaum also serves on the board of the Central Ohio Restaurant Association and volunteers for the local United Jewish Appeal Young Men’s Division.

Appelbaum and his wife share a philosophy about their partnership in Cup o’ Joe, too — that it works because each brings different talents to the table.

“Early on, we both realized where our strengths and weaknesses are,” Michelle Appelbaum says. “To me that is the key to a couple working together. Fortunately for us, his strengths are not mine and mine are not his.”

She coordinates hiring and training, as well as the aesthetic decisions involved in opening each store. He generally handles aspects of site location, accounting and operations, given his business background that includes sales with AT&T and leasing and development work for Arshot Investment Corp.

As a team, the co-owners work to keep life in perspective, Todd Appelbaum says, noting that he could have had seven to eight locations by now if business success was his sole drive in life. Instead, he wants his family to take priority, he says.

“There’s certainly stressful times,” he says. “We remind each other of what’s important, and we don’t expand as fast as we possibly can. We chose family over business.”

Monday, 22 July 2002 09:55

A ship without a rudder

Lexon Corp. was in its fifth year before its owners realized the Polaris-based software design and consulting company might be headed for trouble.

Each of the four owners knew his own division of Lexon well enough and had grown it accordingly. The problem was, nobody was keeping watch over the company as a whole. Lexon was losing its unifying focus.

“We could be four companies right now,” says Kirti Jackson, who runs the manufacturing consulting division for Lexon, while co-owners John Gregor, Sal Aziz and John Dunning run the technology, health care and software development divisions, respectively. “That’s the worst thing that would’ve happened.”

To bring cohesion back to Lexon, the owners realized they’d need more than what the four of them, focused on their own individual divisions, could give the company.

They decided to hire a general manager to run the day-to-day business operations while they continued to lead their own divisions.

“That does not mean we absolve ourselves of leadership,” Aziz stresses. “The four of us are leaders in this company. But because we are individuals in very focused business areas, there needs to be a coordinator of all these. Therein lies a fifth leadership position.”

Sailing in rough waters

Lexon’s loss of cohesion became especially visible to Dunning in May 1995 when the company moved from one small office to a larger one in the same building on Busch Boulevard.

“When we were very small — six, eight, 10 people — we worked very closely, and it was very easy for each one of us to have really a good idea as to what was going on in the company as a whole just by being so small and in close quarters,” Dunning says. “As we started to grow, the first thing that happened was somewhat of a culture shock when we moved into an office that had two sides. That was when people stopped seeing each other as much and, therefore, people became out of touch with things they were not working directly with — including the owners.”

The polarization wasn’t helped by the fact that Lexon’s four owners were becoming so engrossed in their own individual teams that they lost track of general operations. Basic business essentials, such as developing human resource policy manuals, fell through the cracks.

“It was mainly administrative, corporate things that were being ignored until it became so critical that someone had to do something about it,” Dunning says. “Then it was whoever was in the office would take care of it.”

Cash flow management became a problem, and although the owners were clear on their philosophies of running the company, they had trouble articulating their views and making sure the employees were all working toward the same goals.

“From start to finish, everything it takes to run a business, we were doing it in our own way,” Aziz says. “Not that we weren’t capable of handling and performing all those functions, but when you don’t give something the right amount of time, it isn’t going to get done — or get done right.”

The owners began to realize they had reached a crossroads: either remain a small, entrepreneurial company or position themselves for growth as a professional corporation.

A search for new direction

Making the decision required Jackson, Gregor, Dunning and Aziz to face difficult questions, especially once they agreed they wanted to grow Lexon into a large corporation.

Early on, they discarded the idea of one of them taking on the general manager role.

“It was clear that was neither our gift nor our desire,” Dunning says. “We, from day one, were focused on developing our teams and fostering growth. None of us are business manager people from our past history. We just felt it was wiser to hire somebody in to take care of that.”

Next, the owners considered the plain expense of hiring an experienced, corporate-type manager.

They could not pay peanuts and expect someone to fill the critical roles of human resource director, CFO and others. Yet cash flow was an issue, even though the company had grown to almost $3 million in annual revenues in just five years.

Ultimately, they decided to aim high and look upon the general manager’s salary as an investment in the company’s future growth.

“We said we’re going to spend a tremendous amount of money getting somebody in here that’s not going to generate any income but that is going to generate the potential that we need,” explains Dunning.

Once the basic decision was made, the owners grappled with finding the right person who not only had the appropriate skills but who could fit in. “I often thought, ‘We’re never going to find somebody to get along with all four of us,’” says Gregor.

In addition, they realized they’d need to surrender some of their own duties. Gregor, for example, would no longer be responsible for hiring new employees; Jackson had to relinquish his job of examining accounts receivable and talking to banks.

“The entrepreneur that fails never lets go; but to let go is scary, too,” Jackson says.

After a two-month search, the owners hired Roy Smoot, a former senior vice president at Fifth Third Bank, who came recommended by one of Gregor’s friends. Smoot’s resume was practically written for the Lexon general manager job description, Gregor says.

Smoot had:

  • Helped launch a local family business, Pinnacle Performance, which aims to help companies increase employee performance through rewards of tangible gifts.

  • Held six positions at Fifth Third, with responsibilities including training and development, corporate accounts and retail management.

  • Worked in personnel consulting and recruiting, as well as sales.

Although Smoot declined to name specific figures, citing his privacy and that of the owners, he confirmed that Lexon hired him at a salary almost equal to that of an owner. On top of that, there was the promise that Smoot, like other employees whose performance merits it, will one day share ownership of the company.

“We could have taken his salary easily and stuffed it in a number of pockets and been much more comfortable,” Dunning says. But that wouldn’t have yielded the leadership Lexon so sorely needed.

Running a tighter ship

Once Lexon’s owners faced the reality that someone else would be running their company and grew comfortable with Smoot’s capabilities, the new GM was left to discover his role.

Smoot wasn’t ignorant to the importance of finding a way to fit in and learn the company’s culture.

“The way I addressed that is when I came in, I spent a lot of time in one-on-one conversations with people, and not just the owners,” Smoot says, noting that he also talked to the company’s vendors and bankers, for example.

In addition, he pored through the Lexon files, looking at the company’s documented history.

Then, of course, Smoot had to learn about the owners and find out more specific information about their goals for the company.

He gathered all four of them in a room, and for half a day, they discussed their individual positions and the company as a whole.

“The energy in that room increased greatly. They were laughing and smiling with each other. They started doing the ‘I remember when . . .,’ ‘That was a great decision you made about . . .’ and enjoying each other,” Smoot says. “I had a sense they had not done that often.”

Keeping cohesion among the four, in fact, has been one of Smoot’s biggest challenges.

Often, Jackson points out, individual owners go to Smoot to let out steam over a problem with another.

“Early on, there was frustration, and I was not shy in expressing to them it was hard to nail them down,” Smoot says. “While they are different, there are common threads. The frustration is born out of not channeling that in the same direction.”

The four owners say Smoot’s efforts let them manage the company more by committee. For example, they now meet every Monday morning for one to three hours to discuss company issues. Before Smoot joined the company, the four seldom found time to meet.

Aziz points out that the dynamics between the owners and Smoot have worked out fine, but there’s another bonus: The four owners get along better.

“With more communication, that fosters better understanding amongst everybody,” he says.

While Smoot gets the owners’ input on decisions, especially ones with long-term financial input, he lays the foundation so they do not have to spend as much time on day-to-day management issues.

That’s exactly what the owners are paying him so handsomely to do.

“There haven’t been a lot of things here at Lexon that needed to be corrected,” Smoot says, “but a lot needed more structure, more form and more direction while also allowing flexibility — and that’s not easy.”

Sometimes, he just needs to remind the owners that, with him at their disposal, they can address growth issues they would’ve previously discarded due to time constraints.

For example, he discovered one software project that only sold three units in 1998.

“I asked what it would take to sell 12 of those. They said, ‘We can’t. We don’t have the resources.’ You have to look at, ‘No. What would it take?’” Smoot says, because now he can provide the resources.

“We are completely refocusing, redefining, redoing our marketing materials,” Smoot adds. “They are allowing me to drive that, with, of course, all of their input.”

Other business practices under Smoot’s coordination include:

  • Quantifying expectations of sales strategies in order to measure results.

  • Restructuring banking services by taking advantage of more electronic services, for example, and rearranging debt.

  • Maintaining contact with legal counsel.

  • Restructuring human resource processes, including hiring and performance review procedures.

Smoot points out that his general manager role requires him to have a lot of respect for Lexon’s owners.

“Don’t ever forget who took the initial risk and who built the business,” he says regarding advice he’d give to anyone considering a similar position. “You didn’t do it. They did.”

He says he considers it an honor to help Lexon’s owners build a company.

“I will not violate that trust for anything,” he says. “It is a very, very special opportunity.”

On the flip side, the job requires mutual respect.

Even though Lexon is growing from a small entrepreneurial company to a corporation, Smoot and the

owners saw from the beginning the importance of abandoning rigid parameters on either side in order to make the relationship work.

“We all wear a lot of hats,” Smoot says. “I’ve cleaned coffee pots, and so have they.”

Monday, 22 July 2002 09:53

Crisis in the corner office

Lying in the intensive care unit of Riverside Methodist Hospital, Doug Borror had plenty of time to think. About life. About family. About how lucky he was to survive the car crash that left him with severe head and neck injuries. Yet it was all he could do to focus on regaining his health.

He wasn’t even able to worry about his home-building business, despite the fact that he had taken it public less than two months earlier.

“When you’re not feeling good, you think about these things, but you don’t have the ability to focus on it,” says Borror, who at the time was CEO of Borror Corp., now called Dominion Homes Inc.

As his days of recuperation turned into weeks and then months, Borror believed his employees when they told him the Dublin-based business was running smoothly.

“You have no reason to think it wouldn’t be fine, because people are telling you it’s fine,” he says. “But you have no energy to find out things aren’t going correctly.”

In fact, the company was heading for its own spot on the critical list. Without Borror’s leadership, it had continued preparing for what was expected to be the same 30 to 40 percent growth it had enjoyed in past years. There was just one problem: Interest rates skyrocketed, severely curtailing demand. Yet no one at Dominion made moves to slow the business in response.

Borror had been so much the sole leader of day-to-day operations that no one else noticed how far off course the company had wandered. In his absence, the company suddenly was on track to record its first and only annual loss — to the tune of more than $3 million.

Not even Borror realized the scope of the problem until several months after he had returned to work, because financial results of home building show up long after initial investments are made.

By January 1995, Borror knew he’d have to take some drastic measures to make the company profitable again — and ensure that no one’s absence in the future would have such a detrimental effect.


The fall

The fact that Borror had so much hand in overseeing the company’s operations was, in reality, the root of the problem.

Dominion had three operating divisions for homes and condominiums, as well as divisions for lumber, accounting and administration, and land acquisition and development. Each department head reported to Borror, who had been named president in 1987 and took over as CEO in 1992. His father, company founder Donald Borror, was chairman, making deals but not active in the company’s day-to-day operations.

Between 1989 and 1993 — the four years preceding the younger Borror’s accident — the company grew from building 300 houses a year to more than 1,000 in the same time frame. To continue the growth, the Borror family sold 35 percent of the business in a public offering in March 1994, raising $25 million in equity.

“It was a big growth story and a big success story,” says Doug Borror.

The story developed unexpected chapters beginning May 6, 1994, when Borror and his wife, Olga, were run off the road by a semi-tractor trailer truck while driving to their summer home at Lake Erie. Their car flipped end over end and side to side, and the truck driver didn’t stop at the scene.

Olga escaped with a broken shoulder. Doug, on the other hand, was flown by helicopter from Bucyrus to Riverside Methodist Hospital for treatment of a broken neck, serious head injuries and cuts that required 175 stitches. Rounds of surgery for his injuries ended only this past March.

He’d be out of work until Sept. 1, 1994, and the timing couldn’t have been worse. Between the time of the public offering and Borror’s return, interest rates went up — seven times — hampering demand.

“The economics that drive our business would indicate our business was headed to a slowdown,” Borror says.

Individuals at the company in a position to see the signs produced the necessary information — and simply put it on his desk.

“My job was to put all the information together and make corporate business decisions, which would have been to put the brakes on,” Borror says.

Dominion board member Pete Klisares says even the company’s board wasn’t getting information quickly enough to take action. Because the company didn’t have enough of a management structure in place, he says, no one could put all the pieces together as well as Borror would have.

“When you’re walking the streets every day touching every piece of the company, you are the mini computer. You bring everything together,” Klisares says, adding that without that contact, “You don’t know exactly what to be concerned about.”

Borror’s brother, David, the company’s executive vice president, called the situation a real blow to the company. Even he did not understand how the market was changing.

“It hurt everybody’s confidence,” he says. “My brother is somebody who, when people were in doubt as to a decision they had to make, they were used to having his guidance. Without him there, people were not used to keeping the process without his input.”

He says other companies should take heed of the situation where one executive may be called “indispensable.”

“If they really are indispensable, and truly the company is going to be in a bad position without them, that should be a red flag,” he says. “You have to have some sort of a contingency plan.”

There was none at Borror’s company at the time. So while business slowed, directors of the company’s various divisions continued to operate under the guidelines Borror had given them during the growth periods before the accident.

They bought more land. They built more inventory homes, properties constructed before being sold.

When Borror returned, he got a rude awakening — one he came to slowly, given he was still not fully physically nor mentally recovered from his injuries.

“Our sales had dramatically dropped, inventories had been rising,” he says, “and things weren’t looking very good.”


Intensive care

Borror spent the first four months after his return reconstructing the company’s financials to get a look at how the different departments, which functioned so independently, were affecting the company as a whole.

“By the first of January, we were out of cash — which should never have happened, having raised $25 million” less than a year earlier, he says.

Faced with a cash flow crunch — it fell just short of a crisis, Borror says — he first negotiated a short-term line of credit.

“Then I proceeded to work very diligently over the next year to straighten out the ship,” he says, noting that his first objective was to change the company from a family-run business to a professionally managed business.

He hired a professional headhunter, who recruited the company’s executive vice president and CFO, Jon Donnell, a certified public accountant who was vice president and associate general manager with a Phoenix-based real estate and home-building company, Del Webb Corp.

Donnell, who later took on the COO title at Dominion, brought to the company operational talents to complement the customer and marketing skills of Borror, Klisares says.

“Jon Donnell is a trained CFO and, therefore, has a great deal of discipline about the operational numbers of the business, about the cost of every aspect of the business, how best to finance the business. He also had a considerable amount of day-to-day operations experience,” Klisares says. “Donnell brings other aspects they need: a disciplined, procedural, evaluative, financial, computer integrated, system approach to really know what’s happening in a growing business.”

Since hiring Donnell in 19 95, Borror has continued to change management operations at the company.

“Other than the land acquisition business, which is still run by my brother, all the people in key jobs then are not here now,” Borror says, noting that all have been replaced with individuals with more training in professional management.

“Through internal promotions and outside hiring,” he says, “we now have in place a staff and a business plan that would prevent this from happening again.”


Slow recovery

Changes in the company brought a struggle for Borror, first convincing family members that the company would run better this way and, second, adjusting to the concept that he, alone, could no longer take responsibility for every single aspect of operating the company.

“It was a difficult transition. Once I realized we had to make the change, it was a difficult transition for the rest of the staff to make,” Borror says. “It is an evolution we are still making.”

This July, in fact, Borror became chairman and CEO of the company, and Donnell took on added duties as president and COO. Donald Borror is chairman emeritus.

Moving away from the family-run business model has meant demanding that employees be rewarded not simply for their efforts but for their results.

The company’s style of operation is also much more structured now, Doug Borror says.

Decision makers have backups, and committee structures are set up so that groups of people know how and why each critical decision is made.

“Today there’s not one person in this business that we rely on solely,” he says.

That also forces him to give up some control over the company.

One recent morning, for example, Borror was called into a meeting regarding a problem with an employee.

“In the old days, I would have made the decision what to do,” he says. “Instead I brought in Jon [Donnell] and the head of HR to talk about this. I said, ‘We have a problem,’ and I left the meeting. If they can’t figure out how to handle it, I shouldn’t be paying them.”

He admits that he hasn’t totally adjusted to the transition: He returned after the meeting to find out what was decided rather than waiting for his staff to report back to him.

Letting go of his stronghold on the company was hard for Borror at first — until he saw the changes for the betterment of the company, and ultimately for him, his wife and their children.

Now, for example, he no longer works 14-hour days. Unsettled by the realization that the accident could have left his children, ages 5 and 6 at the time, orphaned or at least fatherless, he now spends more time with his family.

The changes seem to have brought Dominion back on course. In 1997 and 1998, the company reported record results in revenues, income and homes sold and delivered.

Klisares says many companies will be fortunate to

escape the situation that brought about Borror’s personal and Dominion’s business changes. However, those businesses could face the same needs of professional structure and contingency plans simply because of significant growth.

That’s why, Klisares says, succession plans and crisis plans can’t be put off.

“No matter how small you are and how sensitive it is and how difficult it is to deal with, you really have to anticipate the worst in order to get the best,” he says. “You hate to work for something 20, 30 years and build it up and lose it all when you could have salvaged a significant portion of your value by being prepared for it.”

Joan Slattery Wall (jwall@sbnnet.com) is a reporter for SBN.

Monday, 22 July 2002 09:52

Managing the maelstrom

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Bill Forquer found himself in the midst of a whirlwind when his company was purchased in June 1997.

It wasn’t the first time. The then-president and CEO of Information Dimensions Inc. already had seen two ownership changes and several management reorganizations in his company, founded through Battelle in 1986.

This change, however, was different.

“On Day 1, we had a $23 million business, but we had no HR department, we had no legal staff, we had no financial system in place, we had no bank accounts, we had no cash and we had no building,” he recalls.

The company’s previous owners, Battelle and OCLC, had provided those operational structures. But new owner Gores Technology Group expected the established software companies it invested in to operate as stand-alone businesses. So in the first 90 days, Forquer had to establish an entire business infrastructure while continuing to market the Dublin-based company’s information management software and help employees adjust to a new compensation plan.

“That was just a really challenging period, but also a very rewarding and satisfying one, because we did very well,” Forquer says.

Maybe too well, in fact. Within just one year, Information Dimensions exceeded the financial goals of its investors, who decided the time was ripe for a sale — to Ontario, Canada-based Open Text Corp.

“I had my first meeting with them the first week of April,” Forquer recalls. “By the first week of May, we had a letter of intent, and by the first week of June, the deal was done.”

The new ownership meant Forquer’s title and duties would change for at least the sixth time since 1993 and employees and customers would adjust to yet another management strategy.

Each change brought its own challenges. At times, leadership issues and company culture differences tempted Forquer to abandon ship. In addition, the company's financial performance was erratic between 1990 and 1995, affected by market conditions and the product line, as well as the ownership situations.

Through it all, however, Forquer’s dedication to the product and to his fellow employees kept him with the organization. To weather the continual changes, he’s sought constants: the culture of the organization, a focus on the product and a dedication to the customers.

The personnel factor

One reason Forquer stayed through the tumult is the people within the organization. Indeed, about 60 of the 100-plus local employees have stayed as long as Forquer.

“There is a strong fabric and culture to this organization that has been the strength,” he says. “I think it’s a culture of innovation, of one where you’re not necessarily saying all the same things the rest of the world is saying. There’s a bit of cowboy or renegade culture. Part of this is because our products have always been on that leading edge.”

Forquer also credits original management for establishing that culture and previous owners for respecting it.

“Nobody did anything to screw that up,” he says. “I think everyone recognized that as a strong asset of the organization and made sure it was protected.”

Forquer also took strides to protect employees and earn their trust. When he took over as president in 1996, while the company was with OCLC, he initiated Hat Chats, Friday all-hands meetings to talk about projects and the operation of the business. He even shared the company’s financials so employees could see how they were contributing to profitability.

He credits this open book management approach with holding the company together through other changes. Under Gores, for instance, the employees’ base compensation was rolled back in exchange for lucrative profit sharing, a move that resulted in a few employee departures but a renewed focus on profitability for those who remained. Those employees also felt empowered by the fact that Information Dimensions had become a stand-alone company under the Gores’ ownership.

Whenever possible, Forquer gave employees timetables for upcoming changes so they’d know when — and whether — they’d have a job under the new ownership.

“Delivering bad news or even the possibility of bad news is better than not saying anything or leaving people up to their own devices of what may happen,” Forquer says. “And I think you have to earn the trust of employees that you’re looking out for their best interests. When you’ve earned that, people are more likely to accept the fact if your answer is, ‘I can’t tell you.’”

About 10 of Information Dimensions’ 100-plus employees lost their jobs during the changeover to Open Text, but that number would have been more than double that had Forquer and Open Text not taken steps to find places for as many employees as possible.

For example, Open Text was subcontracting its shipping work, so to save money — and jobs — that task was transferred to someone already handling similar duties within Information Dimensions.

“One guy told me I reminded him of the governor of Ohio,” Forquer says. “I was out stumping through Open Text trying to bring jobs to Dublin.”

Confidence in the product

Any executive whose company faces a set of changes needs to focus heavily on current sources of revenue and income, Forquer says.

“If they screw that up, the amount of change is going to be significantly more than the changes you think you’re going through now,” he says.

Despite all the company changes Forquer has weathered, the product, BASIS— Information Dimensions’ entire revenue stream — has remained essentially the same: Technology for business systems such as records management centers, corporate libraries or research centers.

What has changed, Forquer says, is affordability of the applications and the ways of generating content. Research Forquer worked on while Information Dimensions was part of OCLC, for example, uncovered the importance of using Web technology to deliver the same product.

“We took an immediate right turn and changed the product plans we had been pursuing,” he says.

Another product development has come with the latest ownership change as Information Dimensions finishes its first year as Open Text’s BASIS division, named after Information Dimensions’ product line. Employees spent 12 months integrating the products — and themselves — into Open Text, and now they’ll begin cross-selling Open Text products as well.

Money talks

Hand in hand with focusing on revenue sources during an ownership change comes an emphasis on current customers, Forquer says.

“If you’re going through change and feel like you’re on the sideline of that change and it’s going to run over you and you can’t do anything about it, money talks, and the financial situation of an organization talks,” Forquer says. “When you’re sick, you go home, and home for a business is its current customers.”

Just as he did with employees, Forquer provided as much information as possible to customers. Fortunately, most of the changes did not affect them, he says, because they saw a familiar set of names and faces.

Because the company kept its Information Dimensions name through most of the changes, customers reacted with, “Fine, you got sold again. Big deal,” Forquer says.

In some ways, the most recent change is more visible to customers because the corporate identity is now Open Text. The product identity, BASIS, remains strong, however, which helps. So does the fact that the BASIS division continues to host all-customer annual meetings to discuss products and changes.

“The other thing we did is we came out early on, because there had been so many ownership changes, and told them what we were doing,” Forquer says. “We distributed a white paper of plans for the year to customers. By the time of the meeting, we showed them where we were, and have continued to operate and beat what we said we were going to do.”

Forquer has also spent a lot of time in the past year traveling to customer companies, such as R.J. Reynolds Tobacco Co. in North Carolina; DuPont in Wilmington, Del.; Centers for Disease Control in Atlanta; and a host of businesses in Europe, to keep them informed about the changes.

Forquer’s focus on customers and the company’s product came as a result of choosing his battles carefully, despite the fact he sometimes felt he had no control over the myriad ownership changes.

“There’s change you can initiate, there’s change that’s going to happen regardless, and there’s change you can affect the way it goes,” Forquer says. “I think every executive has to learn to read a situation and know what situation they’re in and how to adapt to that.”

Joan Slattery Wall (jwall@sbnnet.com)is a reporter for SBN.

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Monday, 22 July 2002 09:51

A hi-tech payoff

Christopher Doerschlag likens technology purchases to gambling.

“The problem with IT investment is it’s hard to quantify the ROI,” says the president and COO of WDA&E architects and engineers. “It’s a very gray kind of decision.”

Doerschlag has seen the gamble bring him a loss. His first investment, a $35,000 workstation purchased about seven years ago, was ahead of its time. The software hadn’t been developed well.

“It was bleeding edge versus leading edge. You almost had to be a programmer to use it,” Doerschlag says. “It was an absolute disaster. Thank God we only bought one.”

The workstation was later sold to a computer reseller — for a mere $1,000.

Doerschlag learned from that experience, and, over time, his investments have paid off in big ways.

Between late 1996 and early 1997, WDA&E sank nearly $50,000 into developing software that streamlines for the firm the process of assembling building configuration options for clients.

That software, Doerschlag says, was a major factor in winning a contract from Mobile Oil Corp., which earned WDA&E $1.8 million in the first two years of service fees.

“That was a big gamble that paid off. We’d made investments in software and hardware because they sounded like they’d make sense, but this automation was kind of, ‘Throw it against a wall and see if it sticks,’” Doerschlag says. The software is now used for other clients as well and cuts project delivery time by at least a third.

Since 1995, the firm has increased its technology investment every year, from 5 percent to the current 15 percent of the company’s operating budget. During the same period, the company’s revenues have grown from about $5.1 million to $8.5 million.

Here’s how Doerschlag has learned to hedge his technology investment bets more carefully.

The equation

Doerschlag says investment in technology is especially important in his field, where the architecture industry’s use of graphics and engineering applications requires heavily powered applications.

While Doerschlag says much of his effort to analyze the firm’s technology needs comes from intuition — “It’s a management-by-gut type of process” — he has found more tangible ways to make decisions.

  • Do the math. “For us, it was a simple equation of cost of new, divided by billable rate, equals time it would require to pay back,” Doerschlag says.

  • Get input. WDA&E has one full-time person and one part-timer to handle information technology needs. “That’s nowhere near adequate,” Doerschlag says, noting that he recently hired a consultant to help.

    He’s also set up an informal board for brainstorming. He and his brother, Martin, the company’s CFO, seek advice from WDA&E’s human resources, IT and operations staff to make investment decisions based on what they’re hearing from employees using the technology. They also survey employees twice a year to analyze the firm’s equipment and software and send key people to major software shows to keep track of new technology.

  • Plan for change. Doerschlag talks with vendors to make sure the technology he purchases can be upgraded rather than replaced over time.

    He also remembers Murphy’s Law.L

“In consideration of implementing new technology, something is always going to go wrong,” he says. “Don’t ever think it’s going to be smooth. Always plan for conflicts in upgrading.”

He also points out that as companies grow, they must consider what their competition is doing. Big businesses often have a disadvantage in the technology investment realm because they get established and would rather hang onto profits than devote funds to the latest technology. Smaller, more entrepreneurial firms can come in with a splash of new technology and pass established competitors.

“You’ve got to keep track of the little guys,” he says. “You cannot become complacent when it comes to investments in technology.”

With faster machines becoming unnecessary due to the speed of the Internet, however, WDA&E has reached a plateau where Doerschlag’s been able to slow the firm’s hardware investments.

“Cost versus time savings was an equation that made sense,” he says of his previous thoughts in constantly buying new hardware and software. “Now it’s all about training the user how to use the software effectively and efficiently.”

The people factor

Doerschlag says he’s planning to add the employee training factor to his technology investment equation.

“When you’re upgrading technology as frequently as we do, you really need to pay attention to the training side of it,” he says.

Already, he’s on the right track:

  • The vendor of the new technology and the firm’s IT staff put on lunch time training seminars in two forms. Large groups get a general orientation about the capabilities of the recent investment. Then smaller groups gather around workstations to walk through the new technology. “Learning is in the doing,” Doerschlag says. “It’s not in the listening and the hearing.”

  • New employees go through orientation, then are partnered with a seasoned employee for hands-on practice.

  • To streamline the training and keep the load lighter for the small IT staff, managers who are a bit more technically adept are identified as information sources, too. Doerschlag hopes to hire another IT employee who will spend 25 percent of work time on computer support and the balance to train employees.

    Technology investment, Doerschlag says, is not just a way to bring a monetary return.

    He’s found the investment important from a recruiting standpoint since high-powered technology can make an employee’s job easier.

    Technology upgrades also are a factor in retention, as employees see the firm willing to make such investments. When WDA&E moves into its new building in Grandview at the start of next year, the firm’s technology will be a focal point in a mezzanine space.

    “We’re doing that because we want to showcase our investment,” Doerschlag says. “It’s a very important part of who we are.”

    Joan Slattery Wall (jwall@sbnnet.com) is a reporter for SBN.

Monday, 22 July 2002 09:50

The hot list

Todd Barnum

president, CEO and chairman

Max & Erma’s Restaurants Inc.

Locally, Barnum’s pick is Oscar’s in Dublin.

“I think they have the best walleye — I love walleye — that I have ever had,” Barnum says. “And my nephew [Craig Barnum] owns it, so I’m taken very good care of.”

Barnum’s favorite restaurant chain, other than his own, is Houston’s, based in Atlanta.

“They’re a large chain that has absolutely the best standards of any chain restaurant I’ve seen,” he says of the steak house.

“Then there are lots of different restaurants I love for lots of different reasons: The Atlanta Fish Market in Buckhead — I love that,” Barnum says. “I love a little restaurant in Birmingham, Mich., called Forte. And Chick-fil-A is my favorite fast food restaurant, because they have a great chicken sandwich.”

Sue Doody

owner

Lindey’s

Doody’s favorite eating spots include those with high standards of food and service.

Among her picks: Le Bec-Fin in Philadelphia.

“It’s small and intimate, so it’s a little different than what most of the Columbus restaurants are. It’s really pricey, but it’s impeccable as far as food and service.”

Another favorite of Doody’s is Mirabelle in London, which has, in some 30 years, changed ownership several times, she says.

“It reopened under the auspices of Marco Pierre White. They refer to him as the ‘Bad Boy Chef’ because he just does things his own way. It’s very hot now. He just took it over,” Doody says, noting that the restaurant’s prime location in the west end of London adds to its success.

Her third choice is Connaught Grill Room in the Connaught Hotel, also in London.

“It just is wonderful food and service. It’s been a top restaurant in London for I’d say 35, 40 years,” Doody says. “It’s internationally known and acclaimed.”

Dave Thomas

founder

Wendy’s International Inc.

Thomas’ top choices include Pete’s Boca Raton in Boca Raton, Fla. The owner is an old and dear friend of Thomas’.

“They have excellent seafood and pasta, and the best Greek salad I’ve ever had,” Thomas says.

Two local eateries tie on his list of favorites: Scioto Country Club and Muirfield Village Golf Club.

“Both clubs have excellent chefs that are attentive to individual tastes,” says Thomas, who is a member at both of these exclusive golf courses. “They also have consistent service and loyal staffs.”

Joan Slattery Wall (jwall@sbnnet.com) is a reporter for SBN.

Monday, 22 July 2002 09:50

Stepping down, but not out

The story of Dan Evans’ time in jail explains his dedication to law enforcement officers and their fight against drugs.

Be assured, the board chairman and retiring CEO of Bob Evans Farms Inc. was not behind bars because of any wrongdoing — simply because of youthful curiosity.

“I like police people,” Evans explains. “When I was growing up in Gallipolis, I used to run around with the policemen. Back then, they didn’t arrest very many people.”

It seems as a 10-year-old, Evans was fascinated with the town jail. He wandered inside to get a closer look, but before he knew it, the officers, in jest, had closed the doors behind him, leaving him to await the jailer’s return to free him from his predicament.

“It was probably 10 minutes,” Evans muses, “but it seemed like an hour.”

Evans’ youthful fascination with police officers turned into active involvement in law enforcement organizations as he grew older.

Evans, 63, is a past board chairman of the Ohio Association of Chiefs of Police’s charitable arm, the Law Enforcement Foundation. Next year he’ll chair its annual fund drive, which finances D.A.R.E. training and the Police Executive Leadership College.

Evans says D.A.R.E., a program in which police officers work with students to keep them free of drugs and violence, is for him likely the most important charity he supports.

“I hate drugs,” Evans says emphatically. “I think if there’s some way to fight that situation, these people will grow up to be better people.”

Evans’ ongoing dedication to law enforcement is obvious with a look around his office: A statue on the corner of his desk, a police officer holding the hand of a small boy, is an award from the Ohio Association of Chiefs of Police, which so appreciated Evans’ support that he is the only person ever given the title of its honorary president. Another plaque honors his dedication to FBI officers; still others, his D.A.R.E. involvement.

In fact, a tour of the small office gives a visitor an inside view of the man who, in 1971, was elected chairman and CEO to succeed his father, Emerson E. Evans, at the helm of Bob Evans Farms.

Just inside the door to the right is a saddle he won at the 1991 All-American Quarter Horse Congress in a contest of cattle cutting, in which horsemen ride into a group of cattle to drive a calf out of it.

“The prize came with some money, but I don’t remember how much. What I really wanted was that saddle,” Evans says. “I rode 10 years to try to win it.”

Siding from a barn he owned in Southern Ohio lines large portions of the walls of his office, as does a poster of John Wayne and pigskin from Evans’ Canal Winchester farm.

Above the fireplace mantel on the left are the head and forefeet of a bear, which Evans hunted in Kodiak, Alaska. On the north wall hang mounts of an antelope and a deer. He also points out the mount of a Dall sheep, which came from what Evans calls his toughest hunt — at 10,000 feet in Alaska.

Beside the fireplace, a glass cabinet showcases photos of Evans’ five children and three grandchildren; on the other side, there’s a Brutus Buckeye figure and some of Evans’ 25 hunting guns.

He shyly opens a closet, filled head-high with ribbons, awards and honors he has received through the years.

“I’ll have to go through this one day,” he says, adding he’ll remain here for a while as the company’s chairman. He’ll fill his retirement time with continuing roles on the boards of National City Corp., Motorists Mutual Insurance Co. and Sherwin-Williams Co.; working with Evans Enterprises Inc., a real estate company he founded that is run by his brother; helping his son Ryan with his rodeo business; and enjoying his hunting and horse hobbies.

They’re not as much fun as running this company, but I enjoy doing them,” he says of his other activities.

Still, he turns his CEO post over to company president and COO Stewart K. Owens with the knowledge that the business is near reaching one of his long-term goals: Sales of $1 billion, a milepost he expects to see in March or April next year.

He’s quick to spread the credit, noting that developing loyalty of employees makes a successful leader.

“I don’t believe that managing people is using scare tactics. They develop their own pressure when you develop loyalty — they put pressure on themselves,” he says of his 32,000 employees.

“The biggest focus I’ve had over the period of years is people,” Evans says. “I just don’t think you can build a company without having strong people. I don’t think I’ve built this company. I’ve given leadership to it, but I think the people have really built the company.”

Joan Slattery Wall (jwall@sbnnet.com) is a reporter for SBN.

Monday, 22 July 2002 09:48

Reeling in the big ones

A few months after Bob Massey stepped down as president and CEO of CompuServe Inc. in 1997, he was thinking about the future of his career.

He’d led 3,600 employees at a nearly $800 million public company where he, himself, had served 20 years.

What interest, then, could this heavy hitter possibly have in joining a start-up company that, founded just two years earlier, was making less than 1 percent of CompuServe’s revenues?

The key: Equity.

When C.J. Petitti, then-president of CallTech Communications Inc., offered him a sizable share in the fledgling calling center company, Massey jumped. Massey was familiar with the start-up because he’d used it for outsourcing part of CompuServe’s $100 million annual investment in customer service, and he was a friend of Petitti. He saw the opportunity to leverage relationships he’d built in the Internet business for CallTech.

“I learned a long time ago the best way to make money is to get equity in a company that you’re building rather than focusing on a big salary,” Massey says, noting he wouldn’t have joined CallTech without an ownership stake. “I wanted a significant piece of the business.”

Petitti was all too happy to accommodate him since “I knew Bob wouldn’t stay for a long period of time unless he had a part of the company,” Petitti says. “I did not want it to be a stepping stone. I wanted him to stay as long as I could keep him.”

Massey says the prospect of growing his own successful company, especially one in his interest area of the Internet, also attracted him to CallTech.

Sure, he admits, there was an amount of uncertainty to joining the start-up. However, the gamble has paid off.

When he first signed on with CallTech, there were about 125 employees — and that included three owners besides Petitti: Todd Price and Kent Bowen, who shared in the management of the company, and Petitti’s brother, Phil, a silent partner. “Today there are close to 1,300 employees. There’s always risk, but I have a lot of self confidence, and I had confidence in C.J., Todd and Kent.”

Now chairman of CallTech, Massey won’t disclose his salary or the proportions of shares of the owners — five as of late October — but he does wish he’d made the decision to have ownership in a company 20 years ago.

“My personal wealth has increased dramatically,” he says. Revenues for CallTech in 1998 were approximately $13.5 million.

He’s also more comfortable with the decision-making process at the smaller company.

“Certainly as president and CEO of a publicly traded company, you make a lot of important decisions,” Massey says.

After all, CompuServe was having troubles of its own near the end of Massey’s term. “The main difference, however, is in the CallTech environment, the owners, the managers, are also the board of directors, and so we don’t have to turn to a third party to make things happen.”

For CallTech’s part, Petitti, who now carries the title of CEO, lauds the payoff in investing in Massey. In his first year with CallTech, Massey recruited major clients BellSouth and Priceline through relationships he had developed while he was at CompuServe.

Having top talent like Massey, as well as former Ohio Division of Travel and Tourism Director George Zimmermann, on staff hasn’t caused any major head-butting among the company management, Petitti adds.

“Quite frankly, we have the personalities to get into a room and disagree, and at the end of both of us talking about it, either one of us works it out or sees the light at the end of the tunnel,” Petitti says.

Still, he’s not naïve; he knows he didn’t get Massey without some sacrifice on his part, too.

“I think that one of the biggest challenges is that you’ve got to let go from doing everything,” Petitti says. “When you get powerful people like Bob, you’ve got to trust in what you’re getting.”

“I think the biggest key is you can’t be blindsided thinking that you can’t give up a lot. You’ve got to give up some equity to get people of this power,” he says.

“But in return, you’re going to get some additional business.”

Joan Slattery Wall (jwall@sbnnet.com) is associate editor of SBN Columbus.