Although he has 67 employees today, it was just six years ago that Duane Jones was running D2 Abatement Inc. with just one employee. Taking two-hour sleep shifts, he spent his first years as the company’s president and CEO balancing his time among building capital, developing a unique market strategy and sharing his vision for services to sustain and promote environmental wellness.
In spite of beginning with a personal bankruptcy filing, Jones never let that get in his way. His hard worked soon paid off when his market niche strategy of cost savings and process improvements, combined with his dedication and sacrifice to his vision, helped generate D2’s first revenue streams. Since then, Jones’ company has achieved average yearly growth of 28 percent, in spite of economic and financial pressures. Jones has also not had to take out any bank loans, allowing D2 to operate as a debt-free corporation.
One of Jones’ proudest achievements is growing D2 not with the help of a large majority company partner but rather with the hard work and talent of his team. Combating the industry stigma that a minority company isn’t sophisticated enough to handle and manage government-based projects for asbestos and lead abatement, Jones has been determined to show that is not the case. In fact, he’s successfully diversified D2’s services to include industrial cleaning, environmental recycling and industrial staffing.
Jones’ the key to succeeding has been developing a skilled and knowledgeable team. He ensures that all D2 employees are cross trained, licensed and certified in most of the company’s service areas, and also makes an effort to keep his employees up to date on the most innovative and effective industry techniques and training as a hands-on leader, allowing employees to learn new skills and creating low turnover.
How to reach: D2 Abatement Inc., (586) 977-6471 or www.d2abatement.com
Andrew E. Harold Jr.
A. Harold and Associates LLC
All of Andrew E. Harold’s experiences as a trained musician and as a U.S. Navy helicopter pilot have proven instrumental in running A. Harold and Associates LLC.
Harold serves as president and CEO of the company, which provides technology, education, engineering, training and management services for both the public and private sector in the United States and abroad. He started the business in 2003 while keeping his day job, but by 2007, he finally was able to become self-employed full time. He knew the risks of leaving a well-paying, full-time job to fulfill his dream of owning his own business, especially with a wife and three children. In spite of the risks, he also knew that he had a lot of passion for having his own business and a drive that could make him succeed.
He earned an SBA certification early on, and his company immediately started winning large contracts from the U.S. Marine Corps, Jacksonville Airport Authority, Army Research Institute and Naval Surface Warfare Center. In the last few years, the company has also been able to earn contracting efforts involving a multiyear project to support Everglades restoration from the Army Corps of Engineers.
Harold places a large emphasis on building relationships with both large and small businesses, and he also focuses on strong communication. He recognizes that if he runs his business using these types of principles, it will bring him many new opportunities for the future.
Under Harold’s leadership, his big risk paid off, and it has been worth the challenges. The company has been ranked as one of America’s 500 fastest-growing companies in 2010 by Inc. magazine. It is also ranked as the No. 3 African-American run company in the U.S. with a three-year growth rate of 1,564 percent. The company is also ranked as the No. 29 company in the government services industry and No. 182 overall.
How to reach: A. Harold and Associates LLC, (904) 265-1940 or www.aha-llc.com
Bob Castro was only a sophomore in high school, but he already had a pretty good sense of the path his life was going to follow. He was going to make his mark on the world by becoming an entrepreneur.
His first step toward meeting that goal was a bit unconventional. Castro dropped out of high school and asked his parents to take out a second mortgage on their home so that he could start a janitorial business. Unfortunately, the risk didn’t pay off and the business failed to catch on. After trying and failing with three more businesses, things weren’t looking good for this young businessman.
But rather than look back with regret at his decision to quit high school or at the failure of these businesses, Castro took the lessons he had learned to heart and used them to bolster his entrepreneurial skills for the next opportunity that presented itself.
In 2001, that opportunity was a business that would become Bankers Healthcare Group Inc. Castro, and his brother, Eric, met Albert Crawford at a networking event and out of that meeting, each decided to invest their limited capital in a new health care financing company.
There were more challenges to overcome, of course, but Castro had been a diligent learner. He saw the importance of putting your customers on a pedestal and finding employees who believe in the same values and work ethic that you do as a leader.
He rewarded his people for hard work and did what he could to foster a culture that was filled with positive energy and a collaborative spirit. He felt this type of environment would result in employees who were filled with self-motivation, self-assurance and a focus on doing the job the right way.
How to reach: Bankers Healthcare Group Inc., (866) 297-4664 or www.bhg-inc.com
As the old saying goes — nothing ventured, nothing gained.
Four years ago, when his employer went out of business, with a wife and two small children at home, Bobby Harris took a huge risk and opened his own company in the freight and logistics industry. He pulled together all of his personal wealth, including all of the money from his 401(k) and invested it in all in starting BlueGrace Logistics Group, which he established in November 2007.
Harris, the company’s founder, president and CEO, pulled from his 18 years of experience in the transportation industry and designed software that allows his customers to quickly pick the fastest shipping routes as well as leverage their relationship with BlueGrace to get the best freight rates.
Harris strategically targeted smaller to medium-sized companies that did not have the resources to create their own transportation logistics department. It turned out to be a win-win situation for all parties, as Harris’ customers see immediate savings via outsourcing transportation and logistics needs, along with enjoying the benefits of BlueGrace’s negotiated rates with the carriers.
Harris has navigated the company’s expansion from the eight original employees to more than 70. The company is on track to meet its 2011 sales projections with double digit growth expected in 2012. BlueGrace currently has a portfolio of 2,500 customers across the U.S., but Harris believes it’s not even the tip of the iceberg regarding the industry’s potential.
Future growth is expected to include the international market, as well as the development of new service offerings that will be available for existing customers, including freight auditing services and bill payment services.
Through his own cunning strategic decisions along with a positive, winning and empowering culture, Harris has developed BlueGrace from his entrepreneurial dream into the company it is today.
How to reach: BlueGrace Logistics Group, (800) 697-4477 or www.mybluegrace.com
Paul Glantz started his business with a simple philosophy – success is borne out of serving the customer. So when he launched the theater company Emagine Entertainment Inc., his goal was to provide an exemplary movie-going experience for consumers. He set out to learn as much as he could about the film industry and found that one of his major obstacles was securing the films themselves because of the practices of large film distributors that favored older theaters in the markets that Emagine was entering. It took some convincing to change the restraint of trade practice in the industry in the industry, but he eventually secured Emagine’s access to all new feature film releases.
It was just the beginning for Glantz’s plan to shake things up by reimagining the way people watch movies. Once he raised the capital and created his futurist theater with Cinema Hollywood, he then worked tirelessly in the community and on advertising campaigns to make consumers aware of the theaters’ innovative product offerings. Glantz quickly won over customers with features such as stadium seating, availability of alcoholic beverages and high standards of cleanliness and food quality. And he didn’t stop there.
As chairman of Emagine, Glantz continues to look for ways to improve the customer’s movie-going experience, whether it’s in presentation, construction or seating. Luxury seating and motion-controlled chairs are now offered at all Emagine locations and in 2005, the theater chain became the first in the world to offer 100 percent digital projection for enhanced viewing. Then in May, he opened Emagine Royal Oak movie complex, which includes private bowling lanes complemented with 10 luxury movie auditoriums.
How to reach: Emagine Entertainment Inc., (248) 842-5817 or www.emagine-entertainment.com
At Tony Conway’s special events business, A Legendary Event, when any employee answers the phone, he or she is automatically responsible for whatever is on the other end. There’s no passing it off to anyone else — the person has to take ownership of it. Taking this approach to customer service is just one way that the company successfully puts on more than 2,500 events each year, which have garnered the company $15 million in revenue and more than 300 awards.
Smart Business spoke with Conway, the company’s owner and president, about how to have strong customer service.
What’s the key to strong customer service?
For leaders, they first have to make sure they’re listening to their customers and that they’re listening to their team. That’s a real key. They have to hear what their team has to say about what they’re dealing with with the customers and what the customers are asking about.
I would say, as well, if you’re going to make the decision to be a leader in any business, make sure you understand every job that everyone in your company has — what they go through, how they do it — so you can have that dialogue with them. If you come in as a leader and you spend no time with your product or your business or with what your talent is providing, you as a leader aren’t going to be effective. You can’t talk about something being hot if you don’t know where the heat comes from. You can’t talk about things being beautiful or fresh if you don’t know how it gets there and how it’s ordered and what the cost is.
There are many leaders out there who say, ‘Well, that’s why I hire the people with the strengths.’ It’s still something that leaders have to be a part of. Someone with that strength will, somewhere along the line, need some help. They’ll need guidance. They’ll need direction. They’ll need an opinion, and if you don’t understand what it is they do, how can you give that opinion? If you’re at the forefront and have no idea what your team does on a daily basis to make that happen, you’re really an ineffective leader.
How do you learn all those facets of the job?
You have to schedule the time, and go and do the job that your team does. You can’t schedule it one time. You have to constantly schedule that. It has to be a part of your calendar.
So if I decide I want to go in and work with the chefs because I want to know a new recipe, I need to schedule that with them. Get in, talk about first where is it ordered, how much it costs, what’s it being sold for, how do we prep it, how do we hold it, will those temperatures hold in a setting where we are. Same with the floral division — going in and saying, ‘Let’s talk about where in Colombia are these flowers coming from? What is the process for getting them here? If we run into a problem, what is our backup in how we will take care of the opportunity?’ [It’s the] simplest things with our team — making them stop and think through the logistics of what we do.
How do you effectively listen?
It’s listening and then repeating that question and stating, ‘If I’m hearing you correctly, what you would like to do is this and this and this. Am I correct? If I understand you correctly, you would like this to be a bright orange instead of a light orange, and I’d like to show you a couple photographs, so we’re making sure we’re on the same level.’
It’s not just listening but following up with that listening and then coming back to that client or employee and saying, ‘In this, did I answer your question, and did we achieve what you were trying to accomplish?’ so you’re really taking it full circle. If they say, ‘No,’ we haven’t solved that, so we go back through that process of coming to an agreement. You have to make sure that you’ve heard them correctly, so ask the question, shut up and let them talk.
We do 2,500 events a year. I can’t remember everything that a customer tells me, so we keep an incredible database. We repeat what we talked about. We send a note and say, ‘It was great meeting with you today, and it was great we talked about this and this and this.’ We’re building this trust and building that understanding.
How to reach: A Legendary Event, (404) 869-8858 or www.legendaryevents.com
Those hoping for a boost in merger and acquisition activity in March were disappointed. It continued a trend of slow activity that persisted throughout much of the first three months of 2011. This first-quarter lag can be attributed to the push in the fourth quarter to complete deals due to the threat of an increasing capital gains tax. But fear not, better days may be right around the corner. Despite the slow start, it appears there will be a significant increase in M&A activity, and 2011 should be a robust year.
Some of the key drivers supporting deal activity in the near future are a direct result of the improving economy. Many companies have rebounded from a dismal 2009 and returned to profitability in 2010. The availability of capital has increased as banks have returned to lending, and private equity groups, which have been sitting on the sidelines for the past 18 months, are looking to deploy capital in order to raise new funds.
In addition to seeking new investment opportunities, private equity groups will look to divest portfolio companies over the near term. Furthermore, many corporations have record levels of cash on their balance sheets, which is fueling a flurry of deal activity as strategic buyers look to grow and diversify.
Although M&A activity was sluggish in March, media and print companies were active in the Cleveland area. Cleveland-based American Greetings Corp. acquired Watermark Publishing Ltd. through its European subsidiary, UK Greetings Ltd. Located in Corby, England, Watermark generates around $40 million in revenue annually and has assembled more than 4,500 greeting card designs in their portfolio. This acquisition broadens the product offering of American Greetings and will allow its European subsidiary to increase its market share.
Another entertaining print company located in the Cleveland area is Mental Floss LLC, publisher of Mental_Floss Magazine. The quirky magazine, “where knowledge junkies get their fix,” is located in the Geauga County suburb of Chesterland and delivers informational facts on just about everything from the most dangerous pieces of art to cheat sheets about the theologian Augustine. Felix Dennis, who introduced the magazines Maxim and Stuff to the U.S., announced his intention to purchase the company and move the headquarters to New York.
Albert D. Melchiorre is the president of MelCap Partners LLC, a middle-market investment banking firm. He is also a director on the ACG Cleveland board. For more information on MelCap Partners, please visit www.melcappartners.com. For more information about the Association for Corporate Growth, please visit www.acg.org/cleveland.
Deal of the Month
March was an excellent month for Wickliffe, about a 10-minute drive east of downtown Cleveland, as Berkshire Hathaway Inc. announced it would acquire Lubrizol Corp. for $9.7 billion. The price was a 28 percent premium above Lubrizol’s closing price before the transaction was announced. Expected to close this fall, the transaction would represent Berkshire Hathaway’s third-largest acquisition to date behind General Re Corp. and BNSF Railway Co. The $135-per share bid price is quite a jump from the $23.56 low hit only two years prior in March 2009. However, the company has rebounded with solid revenue and income since the economic downturn of 2008. Lubrizol, a specialty chemical company primarily engaged in the production of lubricants and additives, has itself been acquisitive. It just recently purchased the personal care business of Nalco Holding Co. for $166 million in January. Lubrizol’s headquarters will remain in Wickliffe and the current management team, led by James Hambrick, will continue operations. Congratulations to Lubrizol on achieving great value with excellent performance.
When Rebecca O. Bagley took over as president and CEO of NorTech, her biggest challenge was learning not only the dynamics of the company but also of the community. This was critical because NorTech is a nonprofit, technology-based economic development organization that serves 21 counties in Northeast Ohio. To overcome this challenge, communication was absolutely critical as she got to know her staff as well as the various constituents in the community that her organization served and worked with. Smart Business spoke with Bagley about how she communicated with her employees and key stakeholders.
What were the keys to effectively communicating when you started?
Being very clear with whether you’re learning and asking questions or you’ve decided on a direction and you’re getting people on board or understanding that direction. It’s important to be clear and concise in your communication and be honest about what you’re thinking at that time. That typically endears people to the organization and gets people on board with what you’re doing.
How do you make sure you’re clear in your communication?
It’s a combination of time and effort spent with the team and what words mean to different people and then going out and bouncing that off of a couple of people who are less familiar with the (organization) or the work.
The biggest thing that I see as an opportunity for lots of people to increase the effectiveness of communication is remember who you’re talking to. It sounds very simple, but talking as a CEO of a larger organization, I don’t typically bring in my PowerPoint presentation. I’ll think of a couple of things I want to talk with them about. Yet if you’re talking to someone who wants to understand more of the detail, make sure you’re giving them that level of detail.
It’s crafting the message for the person who’s listening to it and putting yourself in their shoes in preparation for that and making sure you’re spending a few minutes before the meeting about what the best way to approach it is and not just doing your normal pitch.
You’re not changing the core, but it’s important to be able to do that.
How do you make sure that what you perceive matches up with what they actually hear?
It sounds cliché, but listening is a huge part of that and asking questions — you don’t say, ‘What did you hear me say?’ but you can craft questions as the dialogue goes that can help you understand whether they’re getting it or not. Reading people’s facial expressions and body language makes a big effort — it’s emotional intelligence and making sure you’re picking up on the cues and paying attention to whether people are understanding you. When they start bringing a different topic, it shows that they’re not quite understanding what you’re talking about and that’s why they’re taking it in a different language.
How do you listen effectively?
Most of it is just honestly a commitment to pay attention to what you’re doing at the time and compartmentalizing — this half-hour is for this person. When you scheduled it, you thought it was important enough to schedule, so focus on it. It is important to this person. That level of focus and attention in a hectic environment helps to make the person feel heard. And you learn things because you’re paying attention to the person in front of you. Whether it’s at a networking event or a meeting in the office, focus on the person you’re talking to — and then move on to the next thing. It takes practice though.
[It’s hard] especially depending on what you’ve got going on. You have to leave for your flight in a half hour, so do you want to be listening, or are you thinking of if you have everything in your bag? It’s a challenge sometimes.
How to reach: NorTech, (216) 363-6883 or www.nortech.org
Michael B. Kennedy Jr. was wondering what was taking so long to get a computer rendering completed at KAI Design & Build. He stopped by the desk of the guy who was working on the project and asked what the delay was.
“He said, ‘I’ve been working on this for 25 hours over the past month,” says Kennedy, the 97-employee firm’s president. “If I had this software, I could have been done in five hours.’ A quick ROI in my mind and I said, ‘How much is the software that you need?’ and he said, ‘It’s $1,000, and they said they didn’t have it in the plan.’ You’re a $100-an-hour person and you just said you’re spending 25 hours. That’s $2,000.”
The situation drove home Kennedy’s strong belief in staying in touch with his people to collaboratively come up with the best way to manage a business.
“You really have to get out there and talk to your people,” Kennedy says. “Ask them, ‘Do you have what you need to do your job?’ It’s going to make your business more profitable and your people happier. There’s no way as president I can know what that person is doing in their cubicle to make their job more efficient. Unless you go around and talk to them and implement their ideas, you’ll never know.”
When Kennedy stepped in as president at the design and build firm in June 2008, he assumed the leadership role that his father had held since founding the firm 30 years earlier. He felt he had to prove himself worthy of being the leader.
“My position was to build that trust first,” Kennedy says. “I heard everybody out and asked them if they all had the tools to do their job. I do that with everybody from a lower staff member to an executive. Do you have the tools to do your job? Is there a way you can more efficiently do your job and how can I help you? Instead of a dictatorship, it’s an entitlement. I wanted people to feel like I had an open ear and they could trust me. Then I had to perform.”
That, of course, is the key. Anyone can go out and ask for feedback. It’s what you do with it that makes the difference.
“The difference is when you write it in a plan and put it on a shelf versus coming up with your missions, goals and strategies,” Kennedy says. “Those are the three boxes of a business plan. You’ve got your mission, you’ve got your goals and you’ve got your strategies. Then it sits on the shelf. How do you drive that down to the lowest level of your company? That’s where you need to write the initiatives to implement your strategies. Then you need measurable objectives that you measure yourself on yearly, monthly and weekly in your reports.”
Again, it’s the next step that is key. You need to have those conversations with people to see what they need in order to help you achieve your goals. When everyone is involved, you don’t have the disagreement over the need for software that Kennedy had to deal with. Everybody is on the same page.
“The last thing that is the most difficult thing once you get your initiatives and objectives in is getting the individual objectives at every level,” Kennedy says. “How does the receptionist and the assistant, what are their individual objectives to help us on the overall objective? It’s getting all those driven down.
“Everybody at every level has to understand, ‘Well, how do I contribute to that? How am I measured against that?’” Kennedy says. “We started rewriting those objectives and metrics into their yearly evaluation so they know what’s expected of them and how they contribute to this business plan.”
How to reach: KAI Design & Build, (314) 241-8188 or www.kai-db.com
Michael B. Kennedy Jr. makes sure everyone at KAI Design & Build has a copy of the company’s business plans when those plans are presented. But it doesn’t end at that meeting.
“Each manager, through people’s evaluations, would talk to them individually on how they fit into that role and what we needed them to do,” says Kennedy, president at the 97-employee firm. “Then with the formation of committees, you put the vision out there and have committees in place that meet quarterly or monthly so they can have the buy-in of the plan and take ownership of it. You don’t want to just drive it down their throat. You want input and you want them to take some ownership of it. You explain the theory and concepts and why it makes sense and then you have them buy into it and own it.”
If you find that people that tend to be waiting on you to move forward with plans you thought you had communicated, you clearly didn’t make them feel like they actually owned their role.
“Or they don’t feel like they can make a mistake,” Kennedy says. “Depending on your business, maybe you don’t want them to be allowed to make a mistake. Or you need to define what level they can make decisions without asking you.”
How to reach: KAI Design & Build, (314) 241-8188 or www.kai-db.com
Because Ryan Kugler sought new outlets online, Distribution Video & Audio Inc. stayed cutting edge during the recession. He didn’t know the Internet would also boost his customer service.
DVA, which purchases CD and DVD inventory excess from studios and labels to resell, moved online by selling to other Internet resellers. By finding new ways to expand and attend to his customer base, Kugler — president and co-owner with brother Brad, CEO — has grown DVA to 35 employees, selling 20 million units per year to 350 accounts with 24,000 storefronts, which totaled $24 million in business last year.
Kugler spoke with Smart Business about finding and keeping customers online.
How has technology changed your business?
It has changed the way that we do business because when you’re dealing on the Internet, you’re dealing with people who are not multimillion-dollar companies like Target or Big Lots. You’re dealing with a whole different species of an animal — someone who might complain more, to be honest with you. You need to have a little bit more customer service when you’re dealing with Internet resellers.
No. 1 rule [of customer service is] get back to every single person that reaches out to us … within 24 hours. Even if we don’t have an answer to their question, say, ‘We are researching it. We will get you the answer, give us a minute.’
On Amazon, if you don’t get back to (customers) you get a bad rating. Technology has helped us (stay in touch) because we want to keep a good rating with Amazon; otherwise, you’re kicked off.
How do you handle your marketing?
The biggest challenge … is finding new customers. We are always marketing. We buy mailing lists. We send out letters. We send out postcards. We send out e-mails. We place ads in trade magazines.
If you cut your marketing, you’re not going to get new customers. Now, you can cut marketing as far as keep marketing to the same amount of people at a lower price. Instead of sending out a letter with an envelope — which, with a first-class stamp, might cost you 60 cents — you can go to a postcard, which will cost you 32 cents. You’re still mailing to the customer, and that’s the whole point. Never cut the outflow.
My advice is: Do not cut marketing. Find another area to cut. Cut your water usage. Cut your coffee usage. You need new customers because that’s what’s going to sustain you during a rough economic period. There’s little things you can cut (instead of) marketing.
Is the customer always right?
It doesn’t matter if it’s true. If the customer says this, we just try to work it with that. We want to close the sale. If doesn’t work financially or if it’s going to put us out of business, then we just say, ‘Sorry, can’t do it.’
We will do anything the customer wants as long as it’s legal. If a customer wants a banana taped to each DVD, I’ll say, ‘Sure, we can do it, but here’s the price.’ I’ll apply to the Food and Drug Administration to attach something perishable to a DVD. It’s just going to cost the customer money, and we always tell them that. That’s why I’m still here doing business, because we’ll do whatever the customer wants.
Is there a pitfall to that approach?
My board will complain, saying, ‘Hey, the margin was low on that deal.’ But then I’ll say, ‘What goes around comes around,’ meaning I might have sold something at a low margin, but that customer’s going to order from me again because I did what they wanted.
That’s the whole key. The more attention you put on (customers) and the more you do what they want, the more likely you’re going to get the business again.
HOW TO REACH: Distribution Video & Audio Inc., (818) 848-6111 or www.dva.com