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Turning the corner Featured

1:07pm EDT August 29, 2005
While the practice of psychology is usually limited to people, sometimes psychiatric terms provide the best descriptions for intangible entities, as well.

A case in point is the state of Tutor Time Child Care/Learning Centers in March 2002, when Bill Davis took over as CEO. To say it was depressed is a bit of an understatement — the company was going through a bankruptcy, struggling with weak brand positioning and, as Davis says, “was basically a company with low self-esteem and low motivation.”

So Davis began to lead the company through a therapy of sorts. He assumed the role of CEO of Learning Care Group (the company created when Childtime Learning Centers acquired Tutor Time), and began reworking the company’s financials, rebuilding the management team and reconnecting with employees, who had a desperate need “to see and hear that there will be a better day,” says Davis.

That better day has arrived. Today, Learning Care Group has reached sustainable profitability, developed a strong company vision and mission, and set healthy goals for the future.

Smart Business spoke with Davis about reaching out to employees, turning the company around and leading it toward a bright future.

How did Tutor Time end up in such rough shape?

The company had had five CEOs in three years. When I joined, it was losing $1 million a month and had four months of cash available. The company experienced unparalleled growth in the late ‘90s, but its resources and infrastructure didn’t keep pace.

And there was a lack of passion for the company and its products. I don’t care whether you make cheese or provide a financial product, you have to have a great product. There was no focus on the product here, and no common look or feel to the brand. The facilities were in need of capital.

I was hired to restructure Tutor Time and take it through bankruptcy, and had actually bid to buy the company along with a financial partner. Childtime outbid my offer and acquired the company. The board asked me to head up the whole organization. We had to stabilize the company — and we had to be very careful. We did everything in the open with lots of communication. The board gave me a commitment that they would give me 18 months to integrate the two companies [Childtime and Tutor Time]. Thanks to the acquisition by Childtime, by July 22, 2002, Tutor Time was out of bankruptcy.

But the new company was bleeding badly and would run out of money by the end of the year. The first thing we needed to do was assess the situation and hire strong financial folks. I was able to develop a great team and two brands with a great management team.

There were basically no marketing, IT or human resource departments, so I developed those. The turnaround really increased our leadership group’s abilities. It took about a year and a half before we had our first profitable quarter. In 2004, we reported our first year of profitability.

How did you get employees motivated and excited about the turnaround?

When I started with the company, it was a turnaround situation. We had 500 schools, and I felt it was important to be visible to everyone. I visited two markets every week for a year, more than 25 states. We have 75 definable markets, and each market has 10 to 20 individual units.

In any company, whether it’s a manufacturer with multiple locations or a retail company with many stores, the CEO has to be very visible in a turnaround situation. You also see the situation in each location and can take that back to headquarters and develop action plans.

Headquarters’ employees tend to think they are the ones driving the success or there is a lack of support out in the field. So I changed the name from Headquarters to Support Central and set expectations on the turnaround time for these support employees to answer the phone, respond to e-mail, etc.

And I was very visible. It’s very important to do what you say you’re going to do as well — don’t overcommit or underestimate.

How did you establish a vision for the new company?

Three or four months [after I visited the markets], we developed our vision and mission statement. It was a six-month project that involved all of our stakeholders: the caregivers, center directors, board of directors and shareholders.

We were very inclusive. We developed a questionnaire that allowed these stakeholders to weigh in as we went through the process. The product is a statement that we framed and put on the wall, and it has meaning to everyone. We wanted to develop something that would cause people to say, ‘Yeah, I believe in that,’ and I feel we did.

If you really go through the process correctly, you use pieces of that statement in everything you do, from press releases to communication with customers and providing an environment for children. I have the mission statement on my desk. I live it and breathe it.

We have 8,000 employees, and I think it gives them comfort that they know where we’re going. It’s part of our initiatives for next year and included in all the things we’re doing.

How has your corporate leadership experience in other industries, such as food manufacturing, helped you in your current position?

There are similarities in the companies [that I’ve worked for] and the types of things I needed to do to fix or grow the company. You have to have a vision, mission statement and values, develop a top-notch team, develop a culture, [create a] long-range plan and shorter-term initiatives and goals. Most importantly, you have to hire very talented individuals and do everything you can to support them — give them capital, education, tools and training. And you have to make sure the organization doesn’t have any blockages that stop those individuals from succeeding.

How do you communicate your vision?

We knew we would be changing the name of the company, and the vision statement is what drove the new company. The name Learning Care Group came out of who we are, and all of our communication falls under that umbrella.

Tutor Time and Childtime are our brands. We developed good communications plans for all our stakeholders, and the plans started with the ceremonial meeting we held to reveal the new sign on our building. We made sure shareholders and everyone in the industry got the name change, and we framed it with our mission, vision and values.

What is your strategy for growth?

Initially, we were not looking for acquisitions but to grow with the assets we already had. We are now focusing on franchises, but that was not part of our original plan. We hired a customer service manager that came to us from Walt Disney to educate all of the company on service excellence.

We found that even a good product isn’t enough if it isn’t delivered with good customer service. We are heavily focused on franchising, and we are starting to add units and look at acquisitions. We had some major infrastructure to put in place — technology, software, financial [management] and center management — all in tandem with customer service, before we could consider this type of growth.

When it comes to acquisitions, we want to make sure we can add value to the company before acquiring it. If there is no net gain, we won’t consider it. We are interested in adding units in the markets where we already are. It doesn’t make sense for us to move into new markets.

How do you communicate with so many satellite centers and employees?

We developed an intranet and made a lot of information available for employees. We have weekly communications through e-mail. We’ve increased the number of regional, companywide meetings for management. We’ve developed a lot more staff training vehicles that we consistently put through the company.

The majority of the centers didn’t have high-speed Internet connections, so we put high-speed connections in all the centers. We also offered computer training for all areas and staff members. We feel innovation is value, and we are leapfrogging our competitors with technology and communication to parents and customers.

We also have a monthly newsletter that we use to discuss changes in the product and why we do what we do. You can never communicate too well. We have focused on it and put the infrastructure in place. You have to communicate in as many formats as you can. Some people are fine with e-mails, others prefer print. You have to be duplicative for all.

How to reach: Learning Care Group Inc., (248) 697-9000 or http://www.learningcaregroup.com