Education: Northrop University, bachelor of science degree, aeronautical and astronautical engineering; MBA, Pepperdine University; graduate of Stanford University’s Graduate School of Business and Management Executive Program.
What is the biggest business challenge you’ve faced?
When you make decisions that don’t work out and you have to let go of people for the better of the organization. We’ve had to go through layoffs as we’ve grown over the years.
What is the most important business lesson you’ve learned?
If you have to make an effort to make things work, maybe you shouldn’t. You shouldn’t need a lot of mental gymnastics for something to make sense to do. Logic needs to be evident in that what you’re doing is better for the company. Sometimes you walk away from big opportunities that way. But as long as you win more than your fair share, you’ll be OK.
Collazo on hiring: In the beginning, it was finding people who had the same values as us. But now it’s much more sophisticated. We do psychometric testing. We need people who have the right personality and a bias for empathy. We need to care about the customers and the customers’ experience. People who go the extra mile. Also, we need people who are very bright but who can feel comfortable working with each other.
Behavior is very strong here. We need people who are team players. It’s a complicated business. No one person can do it for themselves.
Collazo on loyalty: To get loyalty, you have to give loyalty. When we say that people are our most important asset, we believe it and try to act that way. We try to give people the opportunity to progress to whatever level they can. This result is employees who are here for a long time.
“We grow our own people,” he says.
What else would you expect from a landscaping company?
Though tongue-in-cheek, the comment isn’t far from the truth as ValleyCrest Cos. has grown to become the largest independent company in the United States specializing in landscape and horticultural services.
While many factors have contributed to the company’s success, Sperber is quick to point out that the biggest key has been recruiting, training and retaining its employees. ValleyCrest has been so successful at the process that, after starting in the San Fernando Valley with little more than a truck and a few hundred dollars in 1949, it today has more than $700 million in revenue and offices across the country.
“Our competitors can buy the same lawnmowers and trucks and fertilizer,” says Sperber. “But it’s our people that set us apart.”
Finding the right people starts with the recruiting process. ValleyCrest focuses on colleges and universities to find its future leaders. The company works with more than 30 schools to offer scholarships and internship programs, some of which have been in place for 35-plus years. Sperber says ValleyCrest has to dig to to find recruits for its 8,000-member work force than it used to, when an interest in horticulture was stimulated by the schools.
“When I was growing up, junior high schools and high schools all had horticulture departments,” says Sperber. “There were a lot of different clubs you could be involved in. With cuts today, there are no more horticultural departments in schools.”
Changes in education have forced the company to adapt, and ValleyCrest doesn’t limit itself to people looking for a career as a gardener or landscaper.
“There are not a lot of kids who say they want to be a gardener for the rest of their life,” Sperber says. “So we look for people from all walks of life. We look for people with different skills sets. Then we recruit, recruit, recruit and train, train, train and let them have wings to do things themselves.”
While ValleyCrest looks for people experienced in the industry, it also seeks those from outside the industry who have potential. Then it assembles them at ValleyCrest’s Calabasas headquarters and puts them through training sessions of three to seven days.
But that doesn’t mean it doesn’t want to hire the kid who mowed lawns as a summer job. In fact, that’s exactly who it wants.
“That’s the person we’re looking for,” says Sperber. “The kid who says, ‘That was a good gig I had in junior high and high school.’ We recently hired a guy who did that. He became a master gardener in California. Then he decided he didn’t want to make $50,000 for the rest of his life, went to college, got an MBA and works for us.”
ValleyCrest also has grown much of its own leadership. The result is a young leadership corps with the experience to help the company grow.
The average age of the company’s 115 branch and corporate managers is 42, and they have an average tenure of more than 17 years; the company’s corporate officers have an average tenure of 12 years. In other words, ValleyCrest is a company people like to work for.
“We’ve gotten a lot bigger in the last seven, eight years, and we’ve injected some new people with new ideas and new thinking,” says Sperber. “But we still have people who have been working here for 35 years.”
Sperber, 43, is a perfect example of ValleyCrest getting a young mind and holding onto it. His father, Burton Sperber, and his uncle, Stuart Sperber, founded the company in 1949. Today, they oversee the business while Sperber runs it.
Sperber cut his teeth at ValleyCrest sweeping out shops, watering plants and doing whatever else needed to be done before studying ornamental horticulture and business administration in college. He then held positions in each of the company’s divisions before becoming president in 1994
During that time, he learned that support and recognition are a critical component of the people-first strategy the company employs. As part of that strategy, last year ValleyCrest celebrated its 55th anniversary by coordinating events coast-to-coast to honor the employees who made it what it is today. More than 7,000 turned out.
Also last year, four members of a landscape crew were killed and another severely injured in an automobile accident. The company set up a memorial fund and matched employee donations 100 percent.
“Our family atmosphere means staying close to our own,” says Sperber.
And in 2003, the company presented five of its workers with Ford F-150 trucks as a reward for their safety records on the job. That kind of recognition helps it keep the best employees so it can deliver the best service possible.
“The biggest thing is keeping your employees happy and motivating them to take care of your customers,” says Sperber.
One way to do that is to create a family-like atmosphere, something that is helped by hiring members of the same families. Sperber estimates that more than 70 families have two or more members working for ValleyCrest.
“We have one family that has had about 52 people working here,” he says. “That’s three generations. There are employees who worked here before I was born and still work here.”
Sperber says that while some companies frown on family members working together in the same divisions, ValleyCrest encourages it. Happy employees equal better service to customers, and besides, it’s a family effort that runs the company and a family effort to recognize contributions from everyone.
“My dad, my uncle and I personally pass out every bonus check (at the end of the year),” says Sperber. “It takes three weeks. We go to every single location and say thanks for all the hard work and pass out the checks.”
Part of ValleyCrest’s growth comes through acquisitions, and an important part of that is successfully integrating new employees into the company culture. A little more than a year ago, that ability came in handy when it acquired Omni Landscape Group, adding more than 600 employees.
“We’ve never been an acquisition machine,” says Sperber. “We’ll do another this year, but we do acquisitions to get great management people. We spend a lot of time with a company (before an acquisition). We think we need to spend a year working with those people.
“If someone has great customers and an average management team, we won’t do it. We all have the same access to the customer. In the end, you need great people to take care of customers.”
How to reach: (818) 223-8500 or www.valleycrest.com
Birthplace: Irwin, North Carolina (at Fort Bragg)
College: The Ohio State University, bachelor of science degree, industrial engineering.
Residence: New Albany
First job: “I called out orders at York Steak House. I was the order girl.”
Career moves: Started as in industrial engineer at Rockwell International, working on programs involving the space shuttle and B1 bombers. After five years, took time off before becoming an account manager at Bradford Travel, where she forged a business relationship that led to her next job <\m> helping integrate the acquisition of the Thomas Cook Corp. into American Express. Following that, she started Troilo & Associates and Travel Solutions Inc.
What is the most important lesson you’ve learned?
You need to accept failure with the same amount of grace as success.
What’s the greatest business challenge you’ve faced?
The greatest challenge for us has been that innovation has been as much of a blessing as it is a curse. Very often, we are ahead of our game.
We’ve had a number of really innovative ideas that we probably started too soon. The corporate community wasn’t ready to accept them yet. Recently, we dusted off some of those that failed before, wrapped a different strategy around them, and now they’re working.
Whom do you most admire in business and why?
I don’t just have one individual. I’ve read Jack Welch’s books. Also, Carly Fiorina (former chairman and CEO of Hewlett-Packard). She fights her fights, picks her battles and knows what she wants.
Oprah. I love Oprah. Abigail Wexner is awesome with what she’s done with the (Columbus) Coalition Against Family Violence.
But what’s missing is perhaps his most impressive accomplishment of all his ability to survive in a changing marketplace.
Collazo, through a variety of roles, has helped Infonet through a maze of turning points since 1970, culminating with his biggest task British Telecom’s acquisition of Infonet in late 2004, resulting in the creation of BT Infonet.
“We’ve been here a long time,” says Collazo, who became chairman, president and CEO of Infonet in 1988. “We’ve had the luxury of growing over 35 years.”
But the road that led to BT Infonet wasn’t a straight and narrow one.
Collazo joined Computer Sciences Corp. in 1969, and a year later, helped it create Infonet, a data communication service. By the early 1980s, Infonet was faced with its first major obstacle in the personal computer boom.
Infonet had hit $300 million in revenue by the late 1970s but dipped to $10 million by 1984, when PCs were selling fast. The crisis nearly put it out of business, but it expanded its technology, learned from the ordeal and forged ahead.
“We had to learn how to quickly react to change,” says Collazo. “We got out of that hole by refocusing the business on data communications for multinational companies and away from the timesharing-based business model we previously had.
“In 1988, timesharing revenues were $50 million versus $10 million in revenue for our emerging data communications business. We grew that business very well, and eventually, data communications became 100 percent of our business.”
In 2004, revenue for data communications was $622 million. To put that in perspective, Infonet’s timesharing business had reached a peak of about $300 million in revenue in its prime. The process of climbing back to financial success taught Collazo some valuable lessons.
“We have to anticipate problems and anticipate markets,” he says. “Now, we have systems in large enough numbers to deal with that stuff.
“We need to be in as many markets as possible so we’re not tied down to any one market. We’re in 70 countries, and some regions are always moving up when others are moving down. If you have many different products, when one goes down, everything doesn’t go down.”
While surviving the PC boom was a huge hurdle for Infonet, Collazo points to 1988 as the company’s first major turning point. That’s when Infonet spun out of the network services division of CSC.
“Basically, we were looking to find partners to buy CSC’s equity in the company,” says Collazo. “We found six telecom partners, Telia (now TeliaSonera), Swisscom, Telefonica, KPN, KDDI and Telstra. These companies became Class A shareholders and also strategic sales/service partners for us globally.”
The second turning point was when InfoNet went public in 1999. Collazo oversaw the move, and the IPO was the second-largest in U.S. history at the time, raising more than $1 billion.
“We had always generated cash,” says Collazo, “but the market was expanding, and we needed capital. So we turned to the market. It was the only way to generate the capital needed. We only used half of what we needed. When we were purchased (by British Telecom), we still had ($390 million) in the bank.”
The third turning point, and by far the biggest, came in 2004. Late last year, while some telecommunications giants SBC and AT&T, Verizon and MCI were tying the knot, Collazo was already on the honeymoon.
In November 2004, three months before those telecoms began joining hands, Infonet was acquired by British Telecom, creating BT Infonet.
“We were the first global value service provider who merged with one of the big telecoms,” says Collazo. “I like to say maybe we started a trend.”
Collazo says the acquisition saved Infonet from being left behind in the telecommunications industry.
“I couldn’t imagine where we would be if we were by ourselves now,” says Collazo.
Not that Infonet was struggling on its own. The company, which provides services including mobile data, network services and multimedia products, reported revenue in 2003-04 of $620 million, with clients including Nestle, Nokia, IBM, Bayer AG, Siemens and Hilton International.
But the company’s small size in a market featuring major global telecoms didn’t allow Infonet to compete on a global scale. So Collazo called British Telecom, one of Europe’s leading telecommunications providers, to see if it was interested in buying Infonet.
“In the beginning, it’s just one-on-one,” says Collazo. “I approached the CEO of British Telecom (Andy Green) and told him why I thought this would be a good acquisition for them. And once he accepted the story, he talked to other British Telecom people.
“Then they had a team of 200 people here doing their due diligence.”
The move gave British Telecom access to some of the world’s largest companies, especially in North American and Asia. For Infonet, the deal nearly doubled its revenue (the final purchase price was $965 million.)
“BT’s focus on outsourcing complemented very well with Infonet’s focus on outtasking,” says Collazo. “Also, while BT was much larger than Infonet, both are customer-centric organizations that recognize the strengths of our human assets.
“While we use different words, our value systems are quite similar exemplary customer service, commitment to innovation, etc. In that regard, it was a very good fit.”
But after pitching the idea to British Telecom, Collazo still had work to do. He had to convince employees and shareholders it was a wise move.
“We tried to keep (employees) focused on business,” says Collazo. “We didn’t want them to get sidetracked with the stuff that was going on. We have good, loyal employees. But we did explain that this was better for us. It was a smart move on our part.
“The major issue with the stockholders was that they felt the price wasn’t high enough. They thought we should wait for a better time to sell. Our position was that we were getting a premium in the market.”
Stockholders had been faced with possible buyouts in the past but always felt the time wasn’t right. This time, though, they approved the deal. Industry analysts also gave the deal a thumbs up, but some wondered if companies would put all their telecommunications needs into one basket. Collazo says that concern hasn’t been warranted.
“We find that about 98 percent of our customers use us exclusively for the kinds of things we do,” says Collazo. “It’s too costly for companies to divide their global communications needs.”
Although Infonet has experience working with comp anies in other countries and communicating with different cultures, Collazo says the acquisition process can be hard, simply because of the different cultures within companies.
“The key thing is that people need to pay attention to other people,” says Collazo. “People are looking at the same scenario with different eyes. So the point of view on the same thing can be very different. It’s corporate culture.
“The other thing that’s difficult in the service department is to depend on due diligence findings to figure out what to do next.”
For example, says Collazo, British Telecom is a $40 billion company that can put a lot of staff on doing analysis work. A company such as Infonet, although bringing in nearly $700 million, can’t afford to do as much analysis.
“The people on the street have to do it for you,” he says. “We have people in 70 countries, and we’re close to the customers. We get so much input from our customers that that’s our market research.”
As BT Infonet moves ahead, Collazo knows there may be bumps along the way. He likens the situation to a marriage which, in the beginning, needs time for adjustments.
“After the marriage, there needs to be a honeymoon period before you jump into any decisions,” Collazo says. “We’re still learning about each other. This is a complicated business. We’re both very much focused on the customer and we don’t have cultural issues, but it takes time.”
How to reach: BT Infonet, www.bt.infonet.com
Education: Degree in electrical engineering, University of Darmstadt, Germany
What is the biggest business challenge you’ve faced?
The challenge is that, how can you work in harmony and understand the needs of other people if you can’t look past the numbers of the company and see the customers and suppliers? All the focus is on your own profitability and growing more and gross, gross, gross. Because of that, you start to forget who is really making it happen. To me, it’s not the product. It’s the people.
What is the most important business lesson you’ve learned?
Knowing myself, who I am and what my strengths and weaknesses are, and not taking myself too seriously. You need to know your limits.
Tu on managing people: Often, people fail miserably. But sometimes it’s not necessarily because they don’t work hard. It’s that they are not put in the right place, so you expect too much.
It can be a challenge to manage that part. You need to communicate and understand each other and have this harmony.
Tu on trust: You have to have trust. The company is bound to make mistakes, and you will have things going up and down with the market, the economy and technology changing. But if you have a team that you are in sync with, when you make mistakes, you can recover quickly.
Tu on Black Monday: We (Tu and Kingston co-founder David Sun) sold our little start-up company to AST for about $6 million in 1985. After we sold the company and had all that cash, we were very happy. Life was really exciting. The American Dream had come true.
Then, on Oct. 17, 1987, Black Monday, we lost everything. Every penny. That was the end of the world for us. Obviously, our stockbroker had invested in some risky things. I had a newborn baby. My parents had emigrated from Taiwan and stayed with me. The pressure was so hard. We couldn’t even tell how we lost it or why.
It was one of the most difficult day-to-day things we faced. I had to get up in the morning and tell everybody I was going to meet David for a business discussion and pretend everything was fine. But in reality, we only had a couple thousand dollars.
Born: Bridgeport, Conn.
Education: Boston University, sociology degree
First job: When I was a kid, I sold cutlery and frying pans door-to-door in Bridgeport. There is nothing like getting thrown out of a third-floor walk-up in Bridgeport. It’s a humbling experience. But they were good knives. I still have them.
What is the biggest business challenge you’ve faced?
It’s something I’m dealing with now. How do you grow a company once you’ve gone over a billion dollars in sales? How do you keep the culture intact, the line of communications open and solid?
How do you get capital and financing? How do you attract new manufacturers that fit well?
A billion dollars in our business means the stakes are getting pretty high. But the answers are no different. You build relationships, build a trust. Make them believers, and they give you money.
What is the most important business lesson you’ve learned?
Never take anything for granted because you really have to make your own luck. You don’t have to work hard. Well, in the beginning you do, but you have to work smart.
You have to utilize your time and take advantage of opportunities so that they become long-term business and long-term relationships.
Perlman on life: My dad had no home life. Everything revolved around business until the day he passed away. I don’t think that’s a healthy way to live.
Today’s world has too much stress. You have to breathe, relax. I never bring my business home with me. I live a completely different life at home.
Because, at the end of the day, no matter how successful I am, there will always be somebody more successful.
Perlman on self improvement: You need to stay educated. I’m a voracious reader. I read everything I can get my hands on.
As a kid, I realized that if you learn one new thing a day, you’ll be ahead of the game. You have created your business. You define your business. Your business doesn’t define who you are.
It’s up to you to broaden your horizons.
Education: Baker University, major in math
First job: Washing dishes in a school cafeteria.
Cherng on restaurant location: Malls are guaranteed traffic. You’re protected in a way because there are a variety of different kinds of concepts. With the mall environment, there is an easier tool to predict the outcome of your business. There’s a strong relationship between the average mall sales and the sales of your own store.
Cherng on competition: We opened our first Panda Inn in 1973. Within a half-mile, there were two other Chinese restaurants on the same street that opened around the same month. I looked at that area for a long time and thought that was a good place to open. Then, the moment I make the decision, boom, boom, those two come. But they’re not there anymore. We had no choice but to survive. Hibachi-San (Japanese cuisine) is really a defensive strategy for us only in malls where Panda Express is. That’s so we don’t get another Asian place coming in.
Cherng on building loyalty: When we started Panda Inn, we had a reputation that our people were very good. Our waiters could get a job anyplace when they left Panda Inn. The reason was we were pretty demanding in how they worked. I don’t just hire a waiter, I hire a future manager.
Cherng on the family business: My father [Master Chef Ming-Tsai Cherng, the first chef at the first Panda Inn, which opened in Pasadena in 1973] was always the first to arrive and the last to leave the restaurant. That was his life. He was very proud of what we have done. For someone to go from always working at restaurants to owning a restaurant ... that was one of his most glorious moments. [Ming-Tsai Cherng died in 1981].
Four years ago, in 2001, Troilo-Krings was running a successful travel consulting firm called Troilo & Associates, which had a division named Travel Solutions Inc. She had founded the business in 1995 after realizing that changes by the airlines in the commission structure created new opportunities for travel consultants. With no more commissions for travel agencies, agents needed to start charging clients a fee for a service that previously had been free, and travel consultants who could provide more than simply an itinerary and plane tickets had a sudden competitive advantage.
But as Troilo-Krings concentrated on establishing consulting projects with Fortune 500 companies, another side of her business Travel Solutions Inc., which dealt with travel management was picking up steam.
“In 2001, we looked at the books and realized that Travel Solutions Inc. was growing faster than Troilo & Associates,” she says. “And we weren’t putting any effort into it. We thought, ‘What would happen if we put effort into it?’”
What happened was that Troilo-Kring’s ability to identify trends in the marketplace and adapt her business to follow provided an unexpected growth spurt, and today she claims that TSi is the “world’s most innovative corporate travel management and meeting and event company.”
Last year, TSi raked in $107 million in revenue; from 2001 to 2005, it rose from being the 28th largest travel management company in the country to No. 7. And in an odd turn of events, Troilo & Associates is now a division of TSi, instead of the other way around.
Troilo-Kings runs TSi with a philosophy of embracing technology rather than simply accepting it, viewing it as a key driver in her ability to adapt and grow the business. Her belief is that if it’s out there, buy it; if it’s not available, build it.
“Where we see gaps in the technology environment, we fill those gaps with our own technology,” she says.
The biggest focus of that technology is finding ways to save time for clients. To find ways to do that, TSi partnered with Travelocity.com and Expedia.com to survey travelers on why they used online travel booking services and never came back, or never used them at all.
“The No. 2 reason was time,” Troilo-Krings says. “So we built a product where people can request travel and they don’t have to shop. That’s the time-consuming piece.”
EZgo and EZplan, a customized online booking product and online travel request form, respectively, are two ways TSi uses technology to make life easier for its clients. It also offers EZsync (traveler profile info), EZwork (an online registration tool), EZtrak (a ticket tracking tool) and EZalert (instant ticket and travel info).
“In an average agent environment, an agent will issue 19 to 20 airline tickets per day,” she says. “With EZplan, they can do up to 125. A lot of times, when people come into our call center, they’re expecting a lot more people. We point to the technology.”
But that doesn’t mean Troilo-Krings eschews human capital in favor of technology. In her business, the human component is critical. So in February, TSi announced its Around-the-Clock service. Instead of dealing with an answering service after business hours, corporations now deal with TSi staff.
The technology and process used with clients varies based on each client’s size. With smaller companies, the relationship with TSi can begin as soon as they request services. Larger companies require a bid process that can last six to eight months, after which getting the relationship up and running can take months more.
Once everything is in place, clients don’t deal with an agent. Instead, they have a customer coach.
“We all have the term ‘leader’ or ‘coach’ at the end of whatever it is that we do,” says Troilo-Krings. “We don’t have (traditional) titles here. We have more of a coaching environment. I think that’s more my style.”
Be a visionary
Troilo-Krings considers herself the visionary of the company, good at coming up with ideas and delegating responsibilities. However, she realizes the importance of surrounding herself with people who are not afraid to bring good ideas to the table.
And it’s not uncommon for someone to walk into her office and say, “Ever thought about this?” or “I have an idea,” or even, “I had a dream.”
But there are times when Troilo-Krings becomes the benevolent dictator.
“That’s when I try to get people to think about it and pull them down the road with me,” she says. “It usually doesn’t take a lot of pulling. I explain things all the time. I think that’s part of our success. When we do something, everybody knows why. They know what their specific role is in making it happen.”
So far, Troilo-Krings’ philosophy is working. Her company has been recognized as one of Columbus’ top privately-held companies and a Top Diversity Owned Business in Ohio. In 2003, the American Society of Travel Agents and Hyatt Hotels and Resorts named TSi a winner of the ASTA-Hyatt Travel Agent Best Practices Study award in the operations category.
“I’m really humbled by that type of recognition,” she says.
But having TSi known as a woman-owned business is only so important for Troilo-Krings.
“It’s important in as much as corporations see the value of that,” she says. “In the beginning, it helped me get funding I wouldn’t have gotten otherwise, minority funding. And some corporations are religious about supporting minority businesses. “But in the view of the general public, I don’t care. I see everybody here as being a huge contributor to the organization. I’m surprised every day people get out of bed and work for me.”
Having people work for her and inspiring them to succeed wasn’t part of Troilo-Krings’ original plan. In 1995, she was completing a project to help American Express integrate with the Thomas Cook Corp. when she began shopping her travel management model to companies. The model, unique at the time, allowed corporations to determine on a menu basis what they wanted to insource and outsource. American Express loved the idea, but it didn’t fit its business model. Troilo-Krings got similar responses from other companies they liked it but couldn’t adapt it. Then someone suggested she start her own travel agency.
“Everybody said the travel agency was dead because the Internet was hot and heavy,” she says. “But I didn’t feel it was dying. I felt there was a place for it. I don’t think it took a lot of convincing because I didn’t really have a lot to lose (her bonus from American Express basically funded the start-up).
“The worst thing you can do is fail. That’s always been my mentality about business in general. If you don’t try, you don’t know.”
Build a sustainable model
Troilo-Kings began Troilo & Associates in April 1995 with three employees herself, an agent and a receptionist. They had 800 square feet of space.
Troilo-Krings had three clients when TSi was added to the mix that June. And it didn’t take long for corporations to buy into her new business model.
“What drove my thought on this model was now that a corporate customer paid for services, they needed to define what they wanted,” says Troilo-Krings. “It’s difficult as a client to outline expectations when you’re asked to pay for it. Whether it’s achieved to the degree you wanted oftentimes is questionable.
“Plus, there were competing interests in business. The corporate client may want the agency to book a certain airline because it’s the preferred one for the company but the agency may have a different relationship. My goal was to help corporations sort all that out.”
Following Sept. 11, Troilo-Krings didn’t lay off a single employee. The business survived the downturn, and the real turning point came in the middle of 2002 when she began re-evaluating TSi’s future.
“That’s when we started bringing in fairly sizable clients,” she says. “It’s grown a lot, not only in revenue but also in cash flow. With consulting projects, there is a beginning and an end. You couldn’t bank on constant cash flow. Now, there’s a big difference in how we do business.”
As the business has thrived, TSi’s client list includes eight corporations with revenue in the billions of dollars, including a $36 billion leader in the telecommunications industry and a financial institution with revenue of $22 billion. And Troilo-Krings and her 80 employees are looking to move into a 12,000-square-foot space.
That’s what a little effort will do.
“The industry has changed in 10 years,” she says. “The defining moment of 1995 (change in commission structure) is long gone. The travel agency business, not just TSi, is very strong. The ones who survived that 10-year cycle came out stronger in the end, and I include TSi in that group. That’s because we adapt to the needs of our customers.
“Nothing about us is cookie cutter.”
How to reach: Travel Solutions Inc., (614) 901-4100 or http://www.ts24.com
Birthplace: Santa Monica
College: Undergraduate degree, Stanford; MBA, UCLA
Residence: Thousand Oaks
Career moves: Prior to joining THQ, he was vice president and chief financial officer of Hotel Investors Trust, a New York Stock Exchange-listed company. Prior to that, he was employed by Deloitte & Touche LLP.
Service: Chairman, Harold Price Center for Entrepreneurial Studies Board of Advisors at UCLA; board member, Alliance for the Arts, a community cultural arts center
What’s the most important lesson you’ve learned?
Failure is never fatal, and success is never final. Mistakes or small failures happen, and when you have success, there is no such thing as reaching success. It’s an elusive goal. Don’t pat yourself on the back.
What was the greatest business challenge you’ve faced?
Our toughest challenge was in 1998. We were having great success with our wrestling license (with WCW). But a competitor outbid us for the renewal of the contract. Our stock went down, and people said THQ is going to struggle. Then we went out and signed WWE. Turned out to be a good move.
Whom do you admire most in business and why?
I always admired my father. He was a partner in Price Waterhouse. He was a very successful CPA. He taught me that you should have strong ethics and treat people the right way.
Rarely does the list include “painful memories.” But for John Tu, CEO of Kingston Technology, it does.
Those memories are pretty high up on the list, and they’ve gone a long way toward making the multibillion-dollar computer hardware manufacturer one of the best companies in the country to work for.
“The reason is because we suffered a tragic, financial disaster,” says Tu.
They called it Black Monday the stock market crash of 1987. Tu and Kingston co-founder David Sun lost nearly $6 million that day all the money from the sale of a previous business.
But out of those dark days, Kingston was born, along with a heightened appreciation for the human spirit.
“All the people in the beginning that we recruited, we were just so appreciative that they came and worked for us,” says Tu. “We knew that maybe we’d be OK, but maybe we’d be on the street. So we really appreciated the little things.
“The (corporate) culture is influenced from (Black Monday) because our lives were so painful and hopeless. You think you’ll never recover from that.”
Kingston’s company values include terms such as “respect,” “loyalty,” and “fairness.” Also on the list is “Having fun ... working in the company of friends.”
That seems to be what really fuels Kingston there is a driving range behind the headquarters, a company band that Tu participates in and the eye-popping $100 million in employee bonuses awarded back in 1996.
The company also has a “Superstar” program that recognizes employees for exemplary work. Nominated by their peers, winners have their biographies and photos posted throughout the company and have lunch with Tu and Sun.
“We just wanted to make sure that the people are being heard and respected,” says Tu. “We always want to think about decisions we’re making and how they may cause pain for other people.”
So far, the decisions have been good ones in 2004, the company broke $2 billion in revenue. But that success hasn’t kept Tu and Sun bottled up in ivory towers. They don’t just have an open-door policy they have a no-door policy, opting to work in cubicles among their employees and department heads.
“It’s a very open environment,” says Tu. “We all sit outside in the open and have these cubicles. David has his, and maybe 20 feet away, I have mine. We are very visible. The cubicles are not high, maybe 3 feet tall.”
Sun made the move before Tu, who had to be coaxed out of his fishbowl by his partner.
“One day I just moved my desk out there,” says Tu. “I was a little bit skeptical, but after a month, I never wanted to work in offices anymore.
“When you sit next to people, you break the barriers. There are no titles. The advantage is communication. You don’t have to go out of your office or call someone on the phone from your office. That’s horrible.”
Tu says that many of the things that create an enjoyable working environment at Kingston revolve around common sense. The driving range behind the company headquarters is a good example.
“In the beginning, we had maybe 10 or 15 people working,” says Tu. “And then, we usually were there until 8 or 9 in the evening. We didn’t go to lunch, we’d just eat in the office. So it was one of those things where you had to do something to have some fun.
“David [Sun] is a golfer. A golf nut. It was his idea. Whenever we were tired or wanted to stretch, we’d just go back there, drive the ball and feel totally relaxed before we went back to work. People have a lot of flexibility, and I think they like it. If you make life more flexible, people have more excitement.”
There need to be boundaries, but being too rigid a leader can backfire. There will always be someone who abuses a privilege but, says Tu, those people are few.
“Which one is more important to have a good, comfortable working environment that is fun and lets people know it is their place, or to worry about a few and then have a very rigid culture?” Tu says. “The majority of people are good and conscientious and willing to put their best foot forward.”
While Tu and Sun do their share to make Kingston a good place to work, Tu says that employees create most of the environment through their loyalty.
“Loyalty is the culture,” says Tu. “I always go back to that. Some say money is the culture, but money is secondary. Loyalty is what you have when you feel the company is fair. You can trust the company. You can depend on the company when it’s a critical time or harsh time.
“Money is always a short-term thing. You can go to some other jobs and other places that will pay you more and more, but there will always be other things you are looking for.”
Tu says he’s not an expect at conducting interviews, but he has learned a few things about finding the right people to fit in, be productive and contribute to the culture at Kingston.
“The questions you ask aren’t important,” he says. “You should just sit down and talk. It doesn’t have to be about trick questions.”
Tu says he talks to candidates about life, family, even last night’s baseball game.
“The most important thing is having common sense,” says Tu. “That’s what you look for. You have to have it. Whether you’re a team player or very smart or a hard worker, it’s all a risk. You don’t know. You’ll find out, but if this person has very good common sense, then you most likely have a successful hire.”
By 1995, Kingston had made enough successful hires to reach $1.3 billion in sales. That prompted Tu and Sun to take out advertisements in the Wall Street Journal and Los Angeles Times saying, “Thanks A Billion!” and listing each employee name. They ran similar ads thanking their suppliers and distributors.
“That was not some well-planned marketing thing,” says Tu. “We figured we have to say something about it. And then maybe the best way to do this is ‘Thanks A Billion!’ in publications all over the world.”
The next year, after 80 percent of Kingston was acquired by Softbank Corp. of Japan for $1.5 billion, Tu and Sun allocated $100 million in employee bonuses.
Not surprisingly, two years later, Kingston began a run of five straight years as one of Fortune magazine’s 100 Best Companies to Work For.
Kingston has won similar recognition for its work environment from other publications, but Tu shies away from the publicity.
“I don’t want to discredit being listed,” says Tu. “But I think if we start becoming conscious of it we have to be listed every year maybe we are doing something that has less substance, and that’s not good.
“Just let it happen. If you do the right things, it will keep the value. The most important thing is that we feel we are doing things the right way.”
That thinking continues to work for Tu and Kingston Technology.
“We are all born equal,” says Tu. “We all have the same desires and pain and happiness. It’s all about coming to work together. Hopefully, what we have done means something to ourselves and other people. Hopefully, we have made some difference in some people’s lives. That’s the success.”
HOW TO REACH: Kingston Technology, www.kingston.com