The Entrepreneurs EDGE 2013 Leading EDGE Awards Program, now in its seventh year, highlights companies generating great economic value for the Northeast Ohio region. These companies embody a sense of purpose that extends well beyond their shareholders to all of their key stakeholders, including the community in which they reside and each employee they have.
Why midsized companies?
Midsized companies are the backbone of our regional economy. They have the greatest potential to grow and create more value for Northeast Ohio:
? Value through spinoff business and meaningful job creation.
? Value through spending with local vendors.
? Value through civic engagement and philanthropy.
? Value because they are dedicated to the region.
For instance, GE Capital and The Ohio State University’s Fisher College of Business came together to establish a research partnership focused on the middle market. The National Center for the Middle Market’s research efforts revealed, “The middle market represents more than a third of American jobs and more than $9 trillion in annual revenue. Further, many of its companies, through their longevity, act as community pillars, providing stable employment and acting as responsible corporate citizens.”
As a strategic resource serving this distinct segment of businesses, The Entrepreneurs EDGE, a 501(c)(3) nonprofit organization, sees that collectively this elite group of companies is poised to impact future growth and change in Northeast Ohio. It is the group’s mission to foster and support these businesses as the region moves past a time of uncertainty, and it does so with many great partners at their side.
A glimpse into Leading EDGE honorees
The Leading EDGE Awards targets companies driving the most value in the regional economy. Criteria for consideration include earnings and compensation, spending with local vendors, philanthropy, job creation and percentage of sales outside the region. From 2009 to 2011, an average of 69 percent of sales at the 101 companies was from outside Northeast Ohio, driving valuable sales dollars back into the region.
Further, these companies, representing both manufacturing and service industries, work for a variety of innovative and cutting-edge industries.
Perhaps best of all, they weathered the economic downturn well and not only kept people working but created new jobs. In 2011, they experienced a growth of 22 percent in full-time equivalent employees. That is nearly 1,200 new jobs with manufacturing companies and more than 800 new jobs with service companies.
Recognizing civic distinction
As part of each year’s program, EDGE recognizes one Leading EDGE honoree that has demonstrated civic distinction in their community.
Among the deserving recipients of this award are BrandMuscle, Fairmount Minerals, Human Arc, Main Street Gourmet, Marous Brothers and PartsSource. These organizations build civic engagement and philanthropy into their company culture and corporate value structure, making it a part of their DNA.
In the case of our 2012 recipient, Human Arc, it is a part of the business model as the company serves a segment of the population that otherwise may be forgotten. EDGE is proud to hold up these companies as great examples of companies serving the community in which they reside.
The 2013 Leading EDGE Awards
Our seventh annual Leading EDGE Awards event will showcase one of our university partners, Lorain County Community College, and multiyear honoree Dealer Tire. Honorees and special guests will gather on Thurs., May 23, at the Spitzer Conference Center at LCCC to celebrate.
Scott Mueller, CEO of Dealer Tire, will share how a shift in the business model and a culture driven around success drove the company to the next level. It will be the kickoff to a yearlong series of events that will bring this elite group of midsized company leaders together. ?
EDGE is a strategic resource serving the middle market in Northeast Ohio that develops leaders and builds companies by improving the performance of their management teams. Through engaging leaders of seven different functional areas (CEO, finance, HR, innovation, IT, marketing and operations), EDGE facilitates shared learning, innovation and growth. EDGE even engages the next generation of leaders through student programs that expose top student talent to great local companies.
2013 Leading EDGE Awards Presented by
MAGNET and Smart Business
Case Western Reserve University
Cleveland State University
Kent State University
Lorain County Community College
The University of Akron
Twenty years ago, Bert Jacobs and his younger brother, John, were looking for ways they could avoid getting typical jobs. Jacobs and his brother never agreed with the standard path for someone coming out of college. In fact, at that time, Jacobs was delivering pizzas and teaching people how to ski to earn a living. The brothers were looking for a unique path to live life how they wanted to live it.
“We wondered if we could create something that fit us better,” Bert Jacobs says.
That fit was The Life is good Co., an apparel and accessories company that spreads the power of optimism in its products and through its nonprofit organization, The Life is Good Playmakers.
Fast-forward to today and Life is good has 260 employees and saw 2012 revenue north of $100 million. Not bad for two brothers who wanted to maintain the fun in their lives.
Jacobs serves as CEO, or chief executive optimist, while his brother John serves as chief creative optimist. The two started their company 19 years ago aided by a drawing of a smiling character named Jake, who has become more than just a logo on the T-shirts but a symbol of optimism and the driving force behind the company and its inspiring message.
“Jake is our hero here at Life is good, and we like to say that Jake has superpowers,” Jacobs says. “Those superpowers guide our decisions.”
Simplicity, gratitude and humor are just a few of the 10 superpowers in total that help shape how the company does business. In recent years, the Jacobs brothers have had to do some self-evaluation as leaders and plan more strategically to understand where to go next with their company and its message.
“We’re 19 years in business and we’re really less about being a clothing company and more about the clothing being a vehicle for an important message,” Jacobs says.
Here’s how Jacobs has overcome the growing pains of leading a small private company into a larger corporation.
Find your direction
Since early in Life is good’s existence, the company’s inspirational message has been both a strength and a challenge for Bert and John Jacobs.
“Our message is so clean and simple that it applies to a tremendous array of different things,” Jacobs says. “So we have a lot of choices, which is a great place to be for a business, but it can also keep you up at night thinking about what we should do and shouldn’t do.”
Jacobs remembers one instance when the company was just above $1 million and he got a call from a large liquor company wanting to purchase more than $6 million worth of T-shirts from Life is good.
“We could have had 600 percent growth, and it was really, really tempting, but it really didn’t have anything to do with the reason why we liked the brand, started the brand or the vision of the brand,” he says.
“There has always been that pressure, and when you’re given an opportunity to go and hit the gas, it’s real tempting to do it.”
That call was the late ’90s, but in recent years, Jacobs says it’s too dissimilar.
“There are always people bringing ideas and opportunities, and I think we have to look and say, ‘How do those opportunities line up with our mission? How do they line up with our vision and with what we’re trying to do with our lives?’” he says.
Knowing what move to make next is one of the biggest challenges in any business. The way to attack that challenge and consider it an asset is to know who you are and act like it.
“That’s how we define branding internally at Life is good,” he says. “The mission of our company is simple — to spread the power of optimism. If we’re going to make a business decision that drives revenue, that’s great. But if it drives revenue and it doesn’t spread the power of optimism, it’s not so great.”
These business decisions come back to the company’s inspirational leader — Jake and his superpowers.
“These superpowers have to start showing up in the deals we do,” Jacobs says. “A big driver of these decisions is knowing our brand. We had good gut instincts back in the early days. Today, we can really line it up against criteria, and it’s pretty easy to take a look and see whether it’s a fit or not.”
Decisions regarding company direction take a great deal of focus. You must consider all that is at stake and who will be impacted by the decisions.
“You need to get away from the details of the business and ask what you want to do with your life,” Jacobs says. “If someone is trying to make a decision about their business and they’re not looking at how that’s going to serve their life, then they’re not going to make the right decision, in my opinion.”
Once you answer that, you have to look at who the stakeholders are of the business and what they want to do.
“You have to start with the highest priorities and who owns that organization and what are they trying to do and where do they want it to be,” he says. “A big part of that is including your customer base in those stakeholders, because a business can’t continue, it can’t thrive, and it can’t grow or do new things without your customers. Then make a decision based on that.”
Regardless of what decision you ultimately make, you have to ensure that you go through a process to understand why you’re making that decision.
“There have been times with this business that we didn’t go through that process, and those are the times that it stings you,” Jacobs says. “We’re lucky that none of those times we did things that sank the ship and we can still live our dream. But if you don’t watch those things, you can lose your dream.”
Just as understanding the company’s direction in recent years has been a challenge, so too has having to let go of some of the leadership responsibility both Jacobs and his brother have had in the past.
“Like many small businesses — the people who started the business play a very critical role,” Bert Jacobs says. “You can sort of kid yourself at some point that nobody can do something better than you can.”
The Jacobs brothers began reading about the struggles that companies go through and the mistakes that leaders make. One thing they saw over and over was that leaders have a tendency to place blame on others for issues in the company, but they’re afraid to have a self-evaluation.
“That was a big step for us,” Bert Jacobs says. “What we did was we created a task force at Life is good and we asked them to critique my brother and I and our other four partners. It was sobering. They were really honest and really candid. There were many areas where we weren’t doing a great job.
“The task force and the criticisms forced us to put some structure in place to reorganize the whole company and align on all our major strategies.”
Going through that evaluation opened doors and enabled autonomy to Life is good and its top management and general managers of its different business units.
“When we clearly paint the vision of where we want to go and we get out of the way, they’re not as good as us, they’re better,” Jacobs says. “That decision has been a real revelation and a breakthrough that a lot of small business owners sometimes never make or make too late.”
For Jacobs, realizing that taking an extra day skiing up in Maine isn’t a bad thing every once in a while has helped him and the business grow.
“The business might be better off without me on a given day,” he says. “Maybe by being around we can get in the way of things. Instead, if we put people in place and we trust the job that they can do, then unexpected things can happen.
“I can point to spots through the years where we probably could have grown stronger, faster and smarter if we did a little less. When something is your baby, you hold it white-knuckled sometimes, and I think we have gotten over that and we’re enabling more things to start happening.” ?
How to reach: The Life is good Co., (617) 266-4160 or www.lifeisgood.com
Great Lakes Science Center, one of the nation’s leading science and technology centers and home to Northeast Ohio’s NASA Glenn Visitor Center, has named Dr. Kirsten Ellenbogen as president, starting May 6.
Ellenbogen brings more than 20 years of experience as an informal educator, learning researcher and senior leader to her new role as the third president for the science center. Her energetic leadership during the last two decades has advanced informal science, technology, engineering and mathematics (STEM) education through four centers with a national or international scope and a combined funding of more than $30 million.
Glenmede, a privately held and independent investment and wealth management firm, announced that Andrew W. Kirkpatrick joined the firm as vice president of wealth advisory in the firm’s Cleveland office. Kirkpatricks’s areas of focus include specialized fiduciary matters and client service with an emphasis on multigenerational trust administration and estate planning.
Ulmer & Berne LLP is pleased to announce the addition of Laura McBride as a partner in the firm’s litigation department. Based in the firm’s Cleveland office, McBride will be the co-chair of the firm’s Energy, Natural Resources and Utilities Practice Group.
Her experience includes public utilities and public law litigation, federal and state contracts and regulatory matters, and business litigation of all types. She also has significant experience in health care and life sciences matters.
Howard Hanna has recently announced that Howard Hanna IV, president of Howard Hanna Ohio & Michigan, was named to the Leading Real Estate Companies of the World (LeadingRE) board of directors. LeadingRE is a network of 550 top independent, local and regional brand-name international brokerage firms in residential real estate. The board of directors reads like a who’s who of real estate, with some of the best minds in the business guiding the organization.
Collection Auto Group is pleased to announce that, for the seventh consecutive year, Mercedes-Benz of North Olmsted has been recognized as one of the country’s top Mercedes-Benz dealerships.
Since 2006, the local dealership has received the prestigious Best of the Best Dealer Recognition Award every year from Mercedes-Benz USA. The local dealership is one of only a handful in the U.S. to receive the honor for seven years in a row.
Welty Building Company Ltd. has announced the appointment of Donald Lydon as group president of Welty Facilities Services. In this role, Lydon will be responsible for overseeing the facilities management to extend the life of facilities and equipment, reduce operating costs and improve energy efficiency for Welty customers.
Lydon comes to Welty after 20 years with Zaremba Management Co. where he was vice president, commercial properties, and was responsible for land acquisition, development and construction for the company’s offices and industrial building portfolio. l
In January 2002, Theodore Zampetis took over as president and CEO of a struggling Shiloh Industries Inc. The leading manufacturer of advanced metal product solutions for high-volume applications in the North American automotive, heavy truck, trailer and consumer markets was $290 million in debt and the banks would not finance the company any further.
Zampetis had only a few weeks to either file a 10K with the SEC or file for Chapter 11 bankruptcy. Rather than roll over and give in, he began to execute a strategy, and he had to do it quickly.
“I got together with my president and my plant head and said, ‘Here’s what I am going to do. Here’s how I’m going to reduce cost and start creating cash flow tomorrow,’” Zampetis says.
Most people had all but kissed Shiloh Industries goodbye but not Zampetis. He knew he could turn the company around.
“We held a teleconference with the banks and all 12 entities were in on the call, and we explained the plan,” Zampetis says. “‘Here’s what is happening, here’s why it’s happening, and here’s what I’m going to do in the next 15 days, 30 days, three months, six months,’ and on and on.”
With time being of the essence, everybody started signing on quickly. Zampetis went around to each customer and plant to tell customers and employees what has happened, why it has happened and what the company’s plan was.
“I told them, ‘You will look back in six months and be proud of what you accomplished,’” Zampetis says.
Here is how Zampetis nursed Shiloh Industries from the edge of bankruptcy and brought it back to life.
Stop the bleeding
Once Zampetis made everyone aware of the dire situation the company was in, he began to focus on stabilizing the business.
“It was execution in three areas: No. 1, I’ve got to stabilize the company because the company was sick, demoralized and it was dying,” Zampetis says. “Once we stabilized the company, the next thing was figuring out what was the root cause of the problem.”
Zampetis had to understand where the company made money, where it lost money and why it was making or losing money.
“Once we started characterizing the process at each plant internally and focusing internally, it became clear to me what the priorities were in the bigger picture of the company and what I had to do,” he says. “Yes, there were a thousand problems, but I didn’t care about the thousand problems. I only cared about the top 10 problems and how I could attack them quickly one by one.”
At the same time, there were external pressures. For instance, one of Shiloh’s main customers had good news for the company. It still had a multimillion-dollar program with Shiloh that it wanted to continue with the organization. The only problem was that Shiloh had no cash to fund the program.
“I said … ‘We are going to the customer and let me talk,’” Zampetis says. “The next day, we were at the customer talking to the highest level in purchasing, and I told him that, in my 31 years in the business, I never thought I would go to the customer and politely, but with tears in my eyes, tell him that he’d better take the contract he awarded to us and give it to someone else, because we simply have no cash.
“‘Under your terms and conditions, we cannot do it. However, if you help us, we can probably do it and do it better than anybody else in the world.’”
With the banks unwilling to budge because the company was $290 million in debt, Zampetis and the executive director of purchasing at the customer company negotiated back and forth until they agreed to help Shiloh Industries fund the program for them.
“I knew one thing; even though this would be a battle going forward, there was only one way to go, and that was up,” he says. “From that point on, Shiloh Industries started climbing and generating cash flow and applying that cash flow back into the company to protect our critical skills and technologies.”
Shiloh’s critical technologies were devastated. The company needed to understand how to bring them up to be best in class and, at the same time, not to let any program down or make any customer dissatisfied.
“We started generating cash flow and applying it intelligently and above all, started deleveraging the company,” he says.
Once the company began to slowly recover, Zampetis had to make sure to communicate throughout the organization so people stayed focused and kept moving forward strategically.
“If we are going to reinforce a culture of transformation, we have to communicate and we have to communicate not only our problems but give our employees, from top to bottom, an idea of what is the source of the problem,” he says. “You have to have a disciplined mind to characterize the process quickly and identify and measure the impact and analyze.”
Moving forward, Zampetis made sure that any decision he made was strategic.
“When the company is in deep trouble, you’ve got to make decisions strategically about all the wonderful ideas that got you into the problem to begin with,” he says. “The old management team did not learn their lesson.”
Shiloh had three objectives: No. 1, to stabilize the company and start generating cash flow, No. 2, to apply that cash flow to deleverage the company and rebuild the company internally, and No. 3, to develop its people to be disciplined so such past situations never happen again.
But just as the company was regaining its footing, the recession of 2009 hit. Chrysler and GM, which make up 60 percent of Shiloh’s business, filed for bankruptcy.
“Everybody thought we were done,” Zampetis says.
As signs that the economy might be in trouble began to spread, Zampetis and Shiloh Industries were taking precautionary measures.
“If you look at our records and look at what happened in November 2008, I took my salary down to almost nothing because I knew there was going to be a disaster,” Zampetis says.
Shiloh’s sales went down 53 percent, its variable manufacturing cost went down 49 percent and its fixed cost, including Zampetis’ salary, went down 39 percent. However, the company made sure to protect its critical skills during the recession.
“I showed our leadership that in a moment of crisis I wasn’t thinking about lining my pocket,” he says. “I told them, ‘We are suffering and sacrificing right now, but at the end of the day, you will look back and be so proud.’”
During 2009 when all of this was happening, Shiloh Industries ended up generating $18 million extra free cash flow and reduced debt.
“In 2010, we were expecting the industry to start picking up because some of our competitors went bankrupt in 2009, and we picked up a lot of their business,” he says. “Our sales revenue from 2009 to 2010 went up 69.7 percent.”
The company’s productivity nearly doubled, its technology became extremely efficient, quality was exceptional and the employees were pumped up about the company’s progress.
“The year 2011 was a wonderful one, and 2012 was a very good year,” Zampetis says. “We now are a clean-balance-sheet company. We have advanced technologies that are the best in the world.”
Today, Shiloh Industries is a $600 million company with 1,400 employees. With the company back to pre-crisis levels, Zampetis decided to retire as president and CEO in December 2012. However, he left the incoming leadership with a very stable company.
“It will be a two-point approach,” he says. “One is to maintain all the good disciplines and don’t water them down because that would be a big mistake. But then the company’s mission looking forward is growth.” ?
How to reach: Shiloh Industries Inc., (330) 558-2600 or www.shiloh.com
Cleveland is home to the Rock and Roll Hall of Fame and Museum, has a world-renowned theater district in Playhouse Square and is clamoring for one of its beloved pro sports teams to finally win a championship.
But do you know how close Cleveland came to being known throughout the land as the Motor City?
“Cleveland turned out the most automobiles in America between 1896 and 1907,” says Derek Moore, curator of transportation history for the Crawford Auto and Aviation Museum at the Western Reserve Historical Society.
“Between 1892, when (Achille) Philion built the first steam carriage in this area, and 1932, when Peerless Motor Car Co. closed its doors, there were more than 115 automobile manufacturers in Northeast Ohio. It was a significant factor in the development of the early automobile.”
Founded in 1900, Peerless began producing cars when Cleveland was the center of automotive production in the U.S. Peerless even employed race car driver Barney Oldfield to pilot its Green Dragon.
So why is Detroit known today as the Motor City? Henry Ford obviously had a lot to do with it when he started Ford Motor Co., built the Model T and came up with a way to mass produce cars on an assembly line.
“Detroit started to have more automobile companies and a big chunk of them were aimed at the lower-middle-class range,” Moore says. “Cleveland had the higher-end cars. More people could afford the cars coming out of Detroit, fewer people could afford the cars coming out of Cleveland, so Detroit’s business started to boom.”
Those realities aside, Cleveland has still done quite a bit to shape the automotive industry worldwide.
Doing their part
Mike Thompson has been selling cars in Northeast Ohio since 1975. It was a time when auto manufacturers employed a lot of people in the region — people who needed cars of their own to drive.
“People from the plants, they bought lots and lots of cars,” says Thompson, who is now the CEO at Montrose Auto Group. “Cleveland was heavy steel back then, and that’s why the ports were so important. We were in the top three of steel-producing cities in the country back then.”
The world has changed, but much of the work to support the cars and trucks we all drive continues.
“We’ve got Lordstown,” says Lou Vitantonio, president of the Greater Cleveland Automobile Dealers’ Association, referring to the General Motors assembly plant. “You’ve got the EcoBoost engine being built in Cleveland, which is Ford’s most popular and most fuel-efficient vehicle. You’ve got Toledo that is heavy into Jeep because of the Jeep production plant. And you’ve got Honda in Central Ohio.”
Lubrizol Corp. is another big player with its work in oils and lubricants along with Eaton Corp. and TRW. But Moore says the ties don’t end there.
“Sherwin-Williams has been a big supplier to the industry with paint,” Moore says. “Down in Akron, you’ve got Goodyear. Lincoln Welding supplying welders to the repair shops. Ohio Technical College is training the future body mechanics and training people in alternative fuels. And the Cleveland Institute of Art — which is in an old Ford assembly plant — they have an automotive design program that is one of the best in the country.”
And so the evolution of the auto industry continues, says Frank Porter, president of Central Cadillac in downtown Cleveland.
“I think we rank second in the nation with the group of suppliers that produce parts that go into cars,” Porter says. “It was just sheer mass that made Detroit what it is today. At the same time, it’s maybe not as diverse as Cleveland is, and I think Detroit suffers because of that.” ?
To learn more about Cleveland’s automotive history, visit the Western Reserve Historical Society
In a market hungry for deal flow, high-quality companies are in demand and valuation multiples are rising. Private equity firms continue to be active bidders at the table with the middle market being fertile ground for buying activity.
GF Data, which reports on private equity transaction activity in the lower middle market (deal values between $10 and $250 million), recently cited valuation statistics from 2012 that point to a market premium paid for quality, size and desirable industry, which, when combined, the sum of the parts can achieve a multiple of EBITDA in excess of eight times for a well-performing business, according to Private Equity Professional Digest.
PitchBook, another reporting firm focused exclusively on the private equity market, cited that more than a third of deals in 2012 had an EBITDA multiple of seven and a half times or greater, lending further support to healthy valuations in the marketplace.
With nearly $100 billion (private equity funds of $100 to $1 billion according to PitchBook) in uninvested equity capital, motivated sellers with companies that possess strong management, have shown solid performance and are in attractive industries can feel confident that the private equity radar is up for those businesses. With ample debt financing today, sponsors are open to a myriad of strategic options — from a dividend recapitalization to a partial or outright sale — for quality companies.
Local private equity firms were active in March. Linsalata Capital Partners completed its first acquisition of 2013 with Signature Systems Group, a New York-based manufacturer of specialty ground surfaces and coverings selling to more than 3,000 domestic and international customers. Signature’s founder and CEO reinvested alongside LinCap in the transaction. Financial sponsor Dubin Clark & Co. exited its investment in the sale. The sponsor completed two add-on acquisitions after purchasing the company in 2007.
Resilience Capital Partners acquired a majority interest in Memphis-based Aerospace Products International, a global aviation parts and equipment distribution and supply chain management firm. Its parent company, First Aviation Services, retained a minority equity interest in the company. The Cleveland sponsor completed five deals in 2012, including CR Brands, a manufacturer of branded and private label laundry and household cleaning products based in West Chester, Ohio, acquired from Juggernaut Capital Partners. ?
Andrew Petryk is managing director and principal of Brown Gibbons Lang & Co. LLC, an investment bank serving the middle market. Contact him at (216) 920-6613 or email@example.com.
In late February, Office Max and Office Depot agreed to merge, pending normal government and shareholder approvals — and while this merger had been anticipated by the financial community for many years, the reasons why this took place are all too common.
The office supply world has changed dramatically over the past 16 years. In 1997, Office Depot attempted to merge with Staples, but the courts halted this due to the potential monopoly. Since then, the rise of stronger independent dealers working in the B2B marketplace, the rise of e-commerce sales (both independent dealers and others), and department stores expanding office supply goods in the B2C marketplace have forced marketplace changes.
Is this just a temporary rearrangement of the deck chairs? There are a number of reasons that make up the failure of these two companies to make it on their own. The first reason boils down to debt.
The bottom line is that these two firms combined have nearly 2,100 stores across the United States. This in itself has created massive amounts of debt — both on the balance sheet and off the sheet too. Office Max has more than $1 billion in off balance sheet debt and $1.7 billion of debt listed on the balance sheet. In addition, there has been another $2 billion in write-downs during of the past five years.
The second lesson is having a stagnant business model heavily based on brick-and-mortar stores. This new company, as yet un-named, will have 2,100 stores nationwide. Competitor Staples will have about 2,000 stores. However, all of the self-serve stores have been in a retail retraction for a few years and have been closing or reducing the size of stores in an effort to cut costs.
What you can expect to see
In order to create a healthy balance sheet, my crystal ball tells me that, due to duplication of resources, over the next few years, you can expect closures of distribution centers, a continuation of store closings, financial write-downs, layoffs and reductions in debt. Will this be enough to please shareholders? Stay tuned.
Since Depot bought Max, will Office Depot bring all of its outsourcing back from overseas or send more out? Will the handling of customer service issues improve or decline? Some clients have been told not to order on Friday, because they won’t deliver on Monday. Will they outsource all delivery personnel?
Will these changes affect their B2B clients? It is very likely — and not in a positive way.
By far, the biggest question is whether all of these changes will impact the remaining store, B2B and e-commerce sales.
What to do right now?
Businesses should control their business destiny and not wait for their dust to settle.
Look at your company’s strategic initiatives. Many common strategic initiatives include cost cutting, vendor reduction, “buy local” and sustainability.
Take this change in the marketplace as a reminder to examine this line item in the budget — even if you aren’t using Depot/Max. As we’ve seen, there isn’t a line item in a company budget that is above scrutiny.
I’ve worked with many clients nationwide and have been able to show them a double-digit price decrease compared to self-serve stores — all the while providing a higher level of service. While the pricing makes one competitive, it’s the service level that maintains loyalty.
Caution: Businesses that look strictly on price may likely be short-changing themselves by not looking at overall value. Consider working with a local partner who can make your office run smoothly. This will lower both hard and soft dollar costs while helping achieve strategic initiatives.
Independent office supply companies carry thousands of products. They have formed their own buying consortiums to lower the cost below self-serve stores and provide nationwide delivery. These include furniture, janitorial/sanitation, coffee/breakroom and computer supplies.
If you could purchase nearly everything for the office, with a reduced number of vendors and have a favorable impact to your balance sheet — wouldn’t you make a change? ?
Bill Botkin is a sales consultant for Today’s Business Products. Contact him at (800) 536-5163 or firstname.lastname@example.org.
Karri Bass loves to do consumer research. As a former Procter & Gamble employee, she constantly thinks about what drives consumer behavior toward a particular product.
That desire is what led her to launch Illumination Research, a marketing consulting company that was founded on a passion for uncovering what makes consumers tick and translating those insights into business-building ideas.
“When I was working in marketing for P&G, a huge part of our job was to better understand the consumer,” says Bass, principal and insight strategist at Illumination Research. “We want to figure out how they think, not only about the product category that we were marketing but in general.
“Who are they as a person? What motivates them? What different segments are there in the marketplace and to really understand that in order to be able to translate all that knowledge into business and ideas.”
Illumination Research was founded in 2005. It now has 25 employees and the capabilities to show its clients exactly how consumers would respond to new product offerings — and offers those clients advice on how to improve.
Start with packaging
One of the marketing aspects that Bass helps clients with at Illumination Research is packaging and how that packaging grabs a consumer’s attention.
“Say a client of ours might be launching a new product,” Bass says. “Part of what they need to do is create a package that breaks through the clutter on the shelf and grabs the attention of the customers. The package has a lot to do with getting attention and speaking to them.”
As an example of finding what catches a consumer’s eye, Illumination utilizes a mobile, virtual wall that projects a life-size simulation of a shopping environment such as a store aisle.
“Before companies ever have to invest in making physical mockups of packages, we can show them on this giant computer screen in the context of what a product will look like,” she says.
Technology and innovation such as this helps Illumination show its clients how a product will look and simulate where a consumer may focus attention depending on what is on the shelf.
“A lot of times, we’re just trying to understand which packages in the aisle or which one of their new designs do the best job of getting consumers’ eyes on them,” she says. “In those cases, we might recommend they do eye tracking with the research.”
The company literally has consumers wear special goggles that track where their eyes go on the shelf to see if the package is even noticed.
“Then we want to understand once they see it what are they communicating about it,” she says. “In addition to innovative technology that allows clients to see how consumers relate to a product on a shelf, Illumination also poses questions to consumers and clients to understand the total messaging and purpose behind a product and how the company wants it to connect with a consumer.
Communication: oral and visual
“At the end of the day, it’s about the communication,” Bass says. “We have certain lines of questioning to get out the messaging and what’s coming across through the words and through the visual. It’s a marriage of both.”
Over the years, Illumination Research has been able to groom its process for understanding the consumer, which has helped deliver stronger results for clients.
“Every time we do interviews with consumers, you’re able to see what kind of questions better help them articulate their feelings,” Bass says. “A lot of our job is thinking on our feet, and we have to very quickly adapt from interview to interview with consumers and figure out what will yield the information that we will understand.” ?
How to reach: Illumination Research, (513) 774-9531 or www.illumination-research.com
Accountants can do much more than prepare your taxes. Stephen W. Christian, managing director at Kreischer Miller, offers some ways to work with your accountant to increase profits and grow your business.
Q: Can your accountant add value and help you increase your profitability?
A. Do you consider your accounting fees to be overhead or an investment? One stereotype of an accountant — bean counter, scorekeeper, tax preparer — deserves its connection with minimal value overhead. But the right accountant takes the historical numbers and information available and helps you navigate a path to increased profitability and a return on your investment.
Accounting firms add value in many ways, but one that C-suite executives are reaping the most benefit from revolves around determining and accessing the right information with which to make timely, informed decisions. Think of all the information embedded in a company’s systems — production statistics, time and productivity information, supplier and customer data, margin analyses, etc. Your accounting firm can assist you in harnessing it.
First, determine the information that would put you in the best position to make decisions and monitor activities. What are the key performance indicators? Your accountant can assist you in determining the appropriate indicators. You can then develop the type of dashboard report you would like to review.
Your accounting and technology teams can assist in automatically populating the dashboard reports. You will be able to review critical information on a daily, weekly or monthly basis from any smartphone, tablet or computer. Stop wasting time with the incredible amount of useless information available to all of us. Work with your accountant to focus on utilizing only the relevant data, putting you on a path toward timely, better decisions that lead to improved profitability.
Stephen W. Christian is a managing director at Kreischer Miller. Reach him at (215) 441-4600 or email@example.com.
When Lisette Poletes joined up with her mother, Hortensia Albertini, to help lead Global LT in 2009, she did so with an air of curiosity.
“Probably for the first eight or nine months I was here, I took an approach where I really just watched what was going on,” Poletes says. “I had to build my own ideas of what I thought was working and not working coming from a different background.”
The numbers show it was time well spent. Global LT, a language training and translation provider, closed 2009 with just more than $9 million in revenue. When 2012 wrapped up, that figure had risen to more than $20 million.
“We’ve had one of the worst economies ever, and we’ve managed to not only survive but thrive,” says Poletes, the 101-employee company’s owner and CEO. “I’m very proud of what the team I work with has done. It’s to their credit.”
Earn employee trust
Poletes joined Global LT with extensive sales and marketing experience from her education at Michigan State University and her prior work experience with Pfizer. But she had not been a part of Global LT, so she had to earn employee trust.
“I wasn’t coming in to take it apart, to sell it, to bring a venture capital firm in,” Poletes says. “I was in it for the long haul.”
Words are one thing, but Poletes backed it up with action.
She invested in new accounting systems and customer relations databases and elevated employees who had worked hard into management positions. She also instituted a profit-sharing program for employees.
“We basically put a plan in place where I don’t take a dividend out of the company if they don’t all get paid,” Poletes says. “It’s fostering that environment where we all feel like we’re in this together.”
Make use of good ideas
Poletes does not need to be the lead voice on every new idea at Global LT.
“We’ve done a lot of different things based on someone saying, ‘This process doesn’t work,’ or, ‘This works in my department,’” Poletes says. “My response is, ‘Let’s make it a best practice and see if we can make it work across all departments.’”
A great example is the suggestion that was made to bring together the people who recruit teachers and translators around the world for the company’s language training department under one leader.
“It was something that had been tossed around in the past, but she came up with a great proposal and a great plan, and we said, ‘Let’s try it,’” Poletes says. “That’s probably been in place the last two or three months and seems to be working well. It may be that we move all our talent to do the entire recruiting under one giant umbrella instead of just for language.”
Keep pushing ahead
As Poletes looks to the future, she sees endless growth opportunities for Global LT’s language services in emerging markets such as China and Brazil. She also sees opportunity in the government sector.
“We just obtained our GSA certification, which allows us to go after government contracts,” Poletes says. “That will be a brand-new focus that has a ton of potential growth.”
And you can be sure that her employees will be part of the pursuit of those new opportunities.
“If it doesn’t work, you can always go back to the way it was,” Poletes says. “But you can’t move forward unless we try these new ideas and who better to come up with them than the people who do the work every day?”
How to reach: Global LT, (888) 645-5881 or www.global-lt.com