EY recently announced promotions of seven professionals based in its Northeast Ohio offices.
Doug Campbell was promoted to partner. He is a member of EY’s Transaction Advisory Services practice. Campbell has more than nine years of experience serving private equity and corporate clients on the buy and sell sides, and he has extensive carve-out divestiture experience relating to sales and tax-free spin-off transactions.
Aaron Swartz was promoted to partner. He is a member of EY’s Assurance practice. Swartz has more than 13 years public accounting experience serving multinational Securities and Exchange Commission registrants and non-public clients primarily in the diversified industrial and consumer products, chemicals, transportation, retail and entertainment industry sectors.
Dan Tompkins was promoted to partner. He is a member of EY’s Advisory practice. Tompkins has more than 15 years of experience working with companies in a variety of industries from a financial, operational and strategic auditing and process improvement perspective.
Michael Dreis was promoted to executive director. He is a member of EY’s Tax practice. Dreis has more than 15 years of diverse business and project management experience serving various industries, including retail, heavy and light manufacturing, utilities, automotive, pharmaceuticals and distribution companies. His functional specialization includes accounting methods, inventory, capitalization and depreciation, the research credit, Section 199 deduction and Internal Revenue Service audit support.
Gary Hengelsberg was promoted to executive director. He is a member of EY’s Assurance Practice. Hengelsberg has more than 17 years of experience providing accounting and auditing services to a broad range of clients, primarily in the industrial products, consumer products and automotive industries. He is responsible for leading teams to support the internal inspections program and other internal monitoring and regulatory activities.
Ed Kilbane was promoted to director. He is a member of EY’s Assurance practice. Kilbane is the director of Americas Assurance Implementation and works with representatives across North and South America to embed new firm policy and enable technology into the audit practice. He has more than 20 years of experience and has worked in both a client service and operational capacity over his tenure
Colin McFarlane was promoted to director. McFarlane is the Global Content Management & Production leader at EY, leading a large global team providing world-class content services across its global enterprise internally and on the EY public website. He is responsible for the strategic development of EY’s content management capability, enabling infrastructure and processes.
Kadish, Hinkel and Weibel recently announced its partner, Stephen L. Kadish has been named the Best Lawyers 2014 Cleveland Tax Law “Lawyer of the Year.”
Kadish has been a leading tax attorney in Cleveland for more than 40 years. His practice areas include taxation, estate planning, probate and business law. Kadish was a founding member of Kadish, Hinkel and Weibel in 1975 and has been a veteran lecturer on tax and business planning matters.
Blue Technologies Inc., an office technology provider, announced its acquisition of Smart Solutions Inc., a Beachwood, Ohio-based IT solutions provider to clients in the education, legal, professional services, government and corporate sectors.
Smart Solutions will become a wholly-owned subsidiary of Blue Technologies renamed Blue Technologies Smart Solutions. Bill Julka, president of Smart Solutions, will remain onboard as vice president and all employees will be retained during the acquisition.
Blue Technologies expands its footprint into the IT space by more than doubling the service and support teams to provide users with an unparalleled level of knowledge and skill.
Great Day Improvements LLC has announced that Sven Kramer has been promoted to national sales manager. He moves to this position from general manager of Stanek Windows, a division of Great Day.
In his new position Kramer will oversee sales training in all markets where Great Day sells its Patio Enclosures, Stanek Windows and SoftWall Finishing Systems. He began his career as an installer with the predecessor of Stanek Windows.
OverDrive, the world’s leading distributor of e-books and other digital media to libraries and schools, announced the appointment of Lee C. Milstein to the new position of chief strategy officer.
Milstein, who previously held leadership roles at YouTube, AOL and DivX, will lead OverDrive’s emerging digital media businesses, including the expansion into streaming video, education content, services and help direct the company’s overall strategy and strategic partnerships.
In addition to Milstein’s strategic role, he will also lead a market development team that will be based in New York City. ●
When it comes to running a family business, some decisions can mean the difference between running the company for a few years before selling it and keeping the business in the family for generations. Kirk Zehnder stood at that crossroads a few years ago with Earnest Machine, and it took some critical decisions to find the long-term path.
Earnest Machine is a 65-year-old, family-run, industrial distributor of nuts and bolts with 75 employees. Zehnder, whose grandfather started the business, is president and CEO.
“We stepped back and said, ‘We can probably run this business for five or 10 years and have a good lifestyle business, or we could make some hard changes and focus on the long-term,’” Zehnder says. “We decided to focus on the long-term and so a lot of family exited the business.”
Some family members took over a main part of the business while Zehnder and other family members retained the distribution side of the business.
“We are selling 2,000-year-old technology,” Zehnder says. “Yet, we embrace change pretty well and we mitigate the family madness that comes with family business.”
Zehnder has been CEO for five years now and his biggest challenge has been changing the focus from the business to the customer and looking at the industry in a bigger perspective.
“We really had to broaden our perspective of the industry and what we do in the industry, and then focus on creating the best customer experience we can,” he says.
Here’s how Zehnder is making the tough calls to keep Earnest Machine running strong.
Make critical decisions
By pausing and thinking about where you want your business to be in the future, you’ve taken the first step to go in a new direction.
“Five to 10 years is a realistic number,” Zehnder says. “Most people can see where they’re going to be in five years. When a company or a family wants to sit down and truly design where they want the business to be in five years, those things start to highlight the weaknesses and the threats start to become apparent.”
Looking out long-term for Earnest Machine helped to address some of the family dynamics that were influencing decisions.
“It’s never easy having some of these discussions,” Zehnder says. “It’s kind of like the credit business — you pay now or you pay later. Sometimes people’s feelings get hurt and people disagree. But you know that’s short-term versus the long-term unwinding of a family business.”
Make the customer count
To keep Earnest Machine growing and in a strong position, Zehnder knew the focus would have to be on the company’s customers.
It seems obvious to have a focus on the customer rather than on the business itself, but in an established family business, the managerial attention sometimes gets paid to things that are less relevant to the business.
“Industrial distribution is five to eight years behind other trends,” Zehnder says. “People aren’t thinking any differently about their nuts and bolts purchases than they are about their coffee. So by focusing on that, we think we set ourselves apart to be different.”
One of Earnest Machine’s recent investments has been its website. Customers can now log in and manage their own accounts. The company can also create custom shipments for customers such as putting their name and logo on the box.
“We have seen over the last five to 10 years that the customer’s expectations have changed pretty radically,” he says. “We took the approach that we are competing with the best retail organizations out there creating a customer experience — that’s who our real competition is, it’s not the people selling nuts and bolts. A little shift in the perspective of the customer gave us a boost that adds value to the company and to our customers.” ●
How to reach: Earnest Machine, (800) 327-6378 or www.earnestmachine.com
Unlike most college campus presidents, Robert Peterson doesn’t have a background in academia. He’s spent more than 30 years in the private sector working for Squire Sanders, EY, Park Corp. and I-X Center Corp. When Corporate College, a division of Cuyahoga Community College, went looking for a new president in 2012, however, that’s exactly the kind of experience it was looking for.
“The college had decided to recruit somebody with business experience,” says Peterson, who assumed the role of president and CEO of Corporate College in October 2012. “That was a great decision, because we are effectively a consulting practice dealing with businesses and providing solutions.”
Corporate College offers training and solutions in areas such as organizational effectiveness — leadership training, team building, change management, supervisor training and executive coaching — quality and continuous improvement programs — Lean Six Sigma, ISO 9000 and OSHA — and IT training.
“When it comes to curriculum, we have to look at the needs of the business community and make sure we have curriculum that addresses those needs,” Peterson says. “There is no need for a course that’s not in demand.”
While Corporate College has been a world-class provider of these services for some time now, it hasn’t put much effort into marketing itself and leveraging the successes it has had. But all that’s changing.
Here’s how Peterson has been using his business experience in the world of academia to further Corporate College’s aspirations.
Utilize your background
While Corporate College is affiliated with Cuyahoga Community College and offers training courses, the college acts more like a consultancy than an academic institution. Having a business background has helped Peterson grow Corporate College and better understand its customers.
“When you’re working across diverse industries, you learn a lot about business,” Peterson says. “That perspective is very helpful in dealing with the business community in Northeast Ohio. Secondly, I’m from the business community. I walked the walk and talked the talk. I understand the situations that they’re in.
“Thirdly, I understand that businesses need to move at the speed of light and that they need a solution that works well.”
That mentality is different than the typical academic environment where fall semester starts Aug. 28 and that’s when everyone starts working.
“When you’re dealing with a business, you have to be quick, nimble and responsive,” he says. “You also have to be a good listener. You can’t act like you’re the expert and you know everything. Businesses don’t want someone who is going to tell them how much they know. They want somebody who is going to listen and provide a solution, and that’s the dimension that I bring.”
In Peterson’s first nine months at Corporate College, he had the opportunity to recruit people to his team. He did so by filling openings with people that had private sector experience.
“That allowed me to assemble my own team,” he says. “We’ve got a good blend of college professionals, but bringing in private sector people adds to the ability to understand the needs of the business and respond quickly.”
Develop a strategy
Peterson’s strategy since arriving has been to make Corporate College the No. 1 provider of corporate training services and solutions in Northeast Ohio. To achieve this, his first step was to increase Corporate College’s visibility throughout the region.
“When I came in, Corporate College had not been very good at marketing itself,” Peterson says. “Brand awareness and brand identification really weren’t there. The accolades and the reviews of what we do are off the Richter scale. However, colleges aren’t used to marketing themselves to businesses. They are used to marketing themselves to teenagers.”
Peterson and his team developed a strategic marketing plan and looked at everything Corporate College had done historically. They also needed to identify where to take the college in order to create a road map for the future.
“Historically, Corporate College divorced itself from Cuyahoga Community College,” he says. “Nobody knew they were affiliated. I however, feel that Cuyahoga Community College is our strongest asset that helps us sell Corporate College.
“I can call any CEO in town and tell them I’m from Corporate College, and I have a hard time getting through. If I call and say I’m from Cuyahoga Community College, I get a return phone call. Cuyahoga Community College has a stellar reputation in Northeast Ohio.”
Due to that reputation, Peterson decided co-branding Corporate College and Cuyahoga Community College was the right solution.
“I’m proud to say I’m a part of Cuyahoga Community College,” he says. “If I relate myself to Cuyahoga Community College, it’s a much easier sell than if I distance myself from it.”
Leverage your strengths
Now that Peterson has built a strong team around him and put more emphasis on marketing Corporate College’s offerings to businesses, he can focus on the most important aspect — the training curriculum.
“As a college, we’re not necessarily profit-motivated, not that we want to lose money doing what we’re doing, but it’s more important for us to do the right thing and make sure that our solution is the right one,” Peterson says. “I’d rather not sell training to you if it’s not going to fix your problem. We’re there to design and sell a solution that specifically addresses your needs in the workplace.”
Corporate College does that through two means — one is traditional open enrollment through a course catalog, and the other is to deliver a customized training program.
“When it comes to curriculum, we can either design it ourselves, or we can go to a third party curriculum content provider, and we can license it from them,” he says. “If we do a lot of training in a certain area, it’s more cost effective for us to make the upfront investment, design the curriculum and own it so we don’t have to license it each time.
“If it’s training that we only do from time to time, it’s more cost-effective to go to a quality third party. That brings credibility to Corporate College and provides world-class training for our customers. I’m always looking for opportunities to partner with first-class content providers to bring best-in-class solutions to Corporate College.”
At the end of the day, what’s important to Peterson is to continue to find ways to make Corporate College a better solutions provider to Northeast Ohio businesses.
“If businesses don’t have trained employees, one of two things is going to happen: They’re either going to fail and go under, or relocate and move to where the skilled workforce is,” he says. “We’re part of the business retention efforts of Northeast Ohio. Our sole purpose in life is to make businesses successful.” ●
How to reach: Corporate College, (216) 987-2800 or www.corporatecollege.com
With no money and little experience in horticulture, Angelo Petitti founded Petitti Garden Centers in 1966 out of an oversized garage — for pretty much no other reason than he enjoyed working outdoors. It wasn’t long before Petitti’s gardening knowledge grew, and he began driving the growth of his business based on the belief that he would one day have a sizeable company in the marketplace.
Fast forward nearly 50 years and Petitti’s love for the outdoors and his attention to quality and customers has allowed Petitti Garden Centers to dominate the Cleveland marketplace.
“The business has evolved from being a very small operation to 800 employees,” Petitti says. “In Northeast Ohio we are pretty well situated with nine stores — and there is definitely a lot more involved today in terms of planning and managing.”
From that oversized garage, Petitti’s grew to multiple locations in the 1980s and launched growing operations to become self-sufficient in all aspects of plants, trees and shrubs for quality, delivery and consistency purposes.
In the early 1990s, Petitti’s opened its first greenhouse, a 32-acre operation near Columbia Station, and a nursery in Lake County that today boasts 1,300 acres for growing. Petitti didn’t stop there. In 2000 he started updating the company’s garden centers.
“Throughout the ’90s we operated with older garden centers, but in 2000 we built the first state-of-the-art garden center in Strongsville that was one of the largest in the United States and had an assortment of products from home, garden, furniture and lifestyle,” Petitti says.
Since then, Petitti’s has built state-of-the-art facilities in Avon, Mentor and Bainbridge.
“There are really no other cities that have that many high-end, state-of-the-art facilities in one area,” Petitti says.
With 270 full-time employees and annual revenue of $45 million, Petitti continues to look for ways he can improve his impressive operation and give customers exactly what they are looking for in terms of their home and garden needs.
Here’s how Petitti has listened to customers to grow Petitti Garden Centers into a state-of-the-art operation.
Believe in your business
While Petitti didn’t enter the horticulture industry with a wealth of knowledge or years of prior experience, he believed he had what it would take to be successful. And in the early years of the business, that’s all it took to get started.
“When you look back at my beginnings, I started with no money and I really didn’t have any experience,” Petitti says. “I really took it day-by-day to learn the horticulture industry. What drove the growth was my belief in having a sizable business in the marketplace and having dominance in the category. That was always the goal from day one. I wanted to keep pushing the envelope.”
Petitti had what many entrepreneurs have when they start a business: commitment and belief.
“Those are the two ingredients you have to have,” he says. “It’s generally not an easy road.”
With all the ups and downs most entrepreneurs face in a new company, especially one like Petitti’s, you have to surround yourself with the best people.
“It’s helpful to have some kind of an advisory board, or a sounding board, where you can discuss your ideas, because that is a big help, especially before making big decisions,” Petitti says. “Through the years I have had a lot of friends who were very successful in the business and being able to talk to them and bounce ideas off them has been instrumental.”
Another matter that is very important is to be part of associations and groups within your industry to help you gain more knowledge and stimulate your creativity.
“Getting to know those people is another big part of how you can inspire yourself to create. It helps you make contacts with people you may want to get ideas from or bounce ideas off of,” he says. “That really helps a lot to see how other people run their business.”
Setting up relationships is really a key part of running a business. It’s not the only thing that will make your business successful, but it’s a big part of growth and navigating the different areas of your industry.
The other instrumental aspect of growth has to do with the people you hire to work in your business. Petitti says this is still one of the most important aspects of his business.
“When you go to hire people, most people hire people that reflect their personalities,” he says. “When you’re building a business from nothing, your gut becomes your No. 1 gauge of what’s right and what’s wrong. Your gut is going to be right 99 percent of the time. That’s been my biggest gauge, and after a while as you get the experience, you get the feel for what is right and what doesn’t feel right.
“Hiring is one area that you really want to put the effort in so you have people that will represent your company and have passion for the industry that you’re in.”
Focus on the customer
Aside from believing in himself and putting in the necessary work to gain knowledge in the industry, Petitti also knew that having a customer-heavy focus in this business would get him far.
“Being independent, we’re in a very, very competitive arena,” Petitti says. “The way we differentiate ourselves is through very high-quality plant material and high-quality service to our customers. That’s something where we have to make sure we pick and train the best employees who share and believe in the same philosophy that we believe in.”
Petitti says he has always been very customer-oriented and treats his customers the way he wants to be treated.
“I always tell our employees to put yourself in the customer’s position and do what you would want someone else to do if you were the customer,” he says. “That’s the philosophy we use. They are empowered to take action and take care of the customer, but we rely on that philosophy.”
Treating the customer well is one thing, but it’s another thing to make sure you’re delivering on what the customer wants from a product perspective.
“We’re very focused on product diversity and making sure we deliver products that our customers are looking for,” he says. “We are also very focused on the plants, which is the core of our business, and bringing the latest innovation in terms of new varieties of plants.
“The focus has been on easier-to-grow plants and longer blooming plants so the consumer doesn’t have to be a plant scientist to grow them. Everything is shifting toward less maintenance, more hardiness and less spraying.”
Lifestyle is another segment of business now receiving Petitti Garden Centers’ focus because customers are looking for it.
“Today, homeowners are trying to tie the outside in with the inside by having nice decks or patios and connecting those rooms to the inside,” Petitti says. “That’s become a very popular thing to do and something people enjoy the most about their homes. So there’s a lot being done in that part of the business.”
It’s not too difficult to ask customers what they are looking for and then deliver on those demands. It’s much tougher to actually be out in front of consumer demand and offer customers things they don’t even know they want.
“You have to have very engaging people on the retail sales force so that they provide what the people are looking for, but they also try to find out the trends,” he says. “We travel to Europe and Asia to look for new trends. We go to all kinds of different shows to pick up on what is coming down the road.”
No matter what industry you are in, connecting with the customer takes work. You can’t expect to manage your business from behind a computer in your office.
“You have to be involved,” Petitti says. “I go on the radio to tell people what is new at the stores. I’m in the stores all the time talking with people and being very engaged with our employees. It’s something that never ends.”
In Petitti’s world, everything that was good this year may be out the window next year. You have to stay on top of it.
“You can’t assume that things are going to be the same next year, and you have to be very engaged,” he says. “It’s a never-ending evolution. It doesn’t matter what product it is, it will get better — more customer-friendly — the following year. Everybody is looking to make things easier for the customer, whether it’s plants or furniture, so that people have fewer issues to deal with.”
Today, few businesses dare to remain stagnant and unchanged. If you believe in keeping the status quo, you’re likely to fall by the wayside. Petitti has tried to do an exceptional job of keeping pace with his industry, and in many cases, leading the pack when it comes to diversifying his business.
“Up until about six or seven years ago, our company was about 75 percent green-oriented, and by that I mean trees, shrubs and plant material,” Petitti says. “We had very little in the lifestyle segment. As the industry has evolved and seasonality has become more important, we recognized that we had to take the seasonality out of the business and get into other areas.”
When Petitti opened the company’s Strongsville location in 2000, the company began selling lifestyle merchandise such as outdoor furniture and grills.
In the past, Petitti’s would sell plants until the end of June and then the rest of the year the company’s stores saw minimal traffic.
“The motivator was to make the business a year-round business versus just a seasonal business,” he says. “Seven years ago there was very little of that kind of merchandise. Today, it represents almost 50 percent of our business.
“Every business really has to look at diversity. If you just have one focus in business, you’re very vulnerable to whatever market changes can come. That diversity gave us a year-round business, allowed us to keep employment for our people year-round and was a big key to the expansion of the business.”
Having recently diversified the company’s offerings to make the business year-round and having updated many of the company’s operations around Northeast Ohio, Petitti says he is excited to see more growth in the business.
“Moving forward, we are going to keep looking at growth, but be much more cautionary and not be quite as aggressive as we were in the past,” he says. “At this point we don’t have any plans to expand beyond Northeast Ohio, but we’re looking to invest more in our stores, our customers and our workforce.” ●
How to reach: Petitti Garden Centers, (440) 439-8636 or www.petittigardencenter.com
After realizing the difficulty health plans and government organizations had in arranging transportation services, Peg and Lynn Griswold were determined to develop a company that ensured people had access to health care.
Founded in 1995, their company, Medical Transportation Management Inc., quickly set industry standards. But after a career with Blue Cross Blue Shield and eight years running and growing MTM, the Griswolds were ready to retire.
In 2003 they chose to transition out of the business by bringing in Lynn’s daughter Alaina Macia to help run the company.
“I joined the company when it was around $30 to $40 million,” Macia says. “At that time, I focused in on every aspect of MTM from marketing to sales strategy to operations, financial review and technology.”
Over the course of two years, Macia got more responsibility and freedom to make decisions and in 2005 was promoted to president and CEO of the company.
“In the beginning, I was really focused on the marketing and sales process,” she says. “We had a good product, but I wanted to make sure people knew about MTM.”
MTM doesn’t own vehicles; rather, the company coordinates transportation that’s already available and manages it from a quality perspective. Over the years, Macia and her leadership team recognized opportunities to expand MTM’s service offerings. Leveraging its resources and experience, MTM adapted its management model, offering new products to help clients align incentives, reduce cost and increase customer satisfaction.
The demand for better transportation products and services was certainly prevalent, and with Macia at the helm MTM has grown to 1,000 employees in 28 states with annual revenue of $175 million.
Here’s how Macia is steering MTM with a focus on growth.
Become a better company
In the beginning of Macia’s tenure as CEO, she had to focus on making MTM better known by the company’s potential clients.
“I wanted to make sure people knew about MTM, knew that we were a potential vendor for their services nationwide and that we understood who our core clients are and where our growth is going to come from,” Macia says. “You have to make sure that you’re marketing to your target audience and that it’s a message they want to hear and that the person carrying that message is someone the client is going to listen to.”
After ensuring the company’s message was targeting the right clients, Macia turned her focus to MTM’s operations and technology.
“As you bring on more clients, you need to become more efficient and continue to lower your overhead and operating costs so that you can grow profitably and in a high-quality manner,” she says. “If you don’t, you’re going to have issues going from a small to midsized company.”
Once MTM got to a critical mass point, Macia had to turn her attention toward ensuring the right people were on the team.
“The people you start with may not be the same people you need at a higher level,” she says. “You really are only as good as your team and the people around you. You have to focus on bringing in talent and not just hiring to fill a seat, but finding that best person for that job and that culture.”
Manage new growth
Despite all the areas of the business Macia has been focused on over the years, her biggest challenge has remained managing the growth of MTM.
“We are a high-growth company, but we never want to grow and sacrifice the quality to our existing customers,” Macia says. “So we make sure we isolate those clients so it’s business-as-usual for them while we’re growing, implementing and staffing for new programs.
“Like a duck, we want to appear very smooth to all our clients even if we’re working very feverishly under the water.”
MTM has continued to grow in its core markets, but has been leveraging its capabilities to become more diverse.
“One of the things we’re focused on for growth is home and community-based services, and that’s all the services an individual needs to stay in the home as opposed to going into a nursing home or a long-term care institution,” she says. “Transportation is a big component if somebody’s going to stay in their home and still get to medical care, church, to see friends and have a social life.”
MTM is putting networks together to deliver home and community-based services, which are a big push under health care reform. However, those services aren’t the only ones Macia has her eyes on for expansion.
“We are also focused on moving into public transportation and school-based transportation and working with our managed care clients to provide additional services like ambulance management, claims management and customer service operations for them,” Macia says.
Growth in your core service offerings is one thing, but growing new offerings takes a lot more focus and attention.
“It’s really about prioritizing what you believe you can be successful in and what is going to generate return on investment so you can continue to invest in your services,” she says. “You need to realize what you can do effectively and make money as well. If you can’t make a profit then you’re going to diminish what you could have invested in your core product.”
When growing both your core service and a new offering you have to make sure you’re not taking your eye off of either ball.
“You have to have enough energy around the new products that you’re actually going to be successful in making it happen, but not take away so much attention from your core product that you’re diminishing the value to your clients,” Macia says.
“It’s about being honest with yourself, your company and your staff about what you can achieve. At the same time, human nature is to avoid change, so a lot of times as a business leader you have to make sure people aren’t pushing back. So you have to assess what your capabilities are and what your team can do.”
Tap strong talent
As MTM has grown and expanded its services and product offerings, the company has had to ensure that its team is equipped to handle the new work.
“We are continually recruiting talent and making sure we have the right fit both from individuals who are running our programs in our local markets that are client-facing, and internally with the specific talent we need across different areas of the business,” Macia says.
During the hiring process, you have to be diligent and ensure that the person you bring onboard fits into your company culture.
“Obviously when you’re looking to bring someone in, they need to have the background and experience for that position, but it’s not just background and experience,” she says. “They need to fit within your culture and should interview with multiple individuals within the organization. After we’ve identified top candidates, we usually use a third-party vendor to assess their critical thinking skills and whether they’re a fit for the role.”
MTM’s process helps slow people down who might be looking to simply fill a position because they have a gap versus truly finding the best person for the job.
“We want people to be successful at MTM for them and for MTM,” Macia says. “We don’t want to hire people who are not a good fit, because it’s time and money for MTM, and its demoralizing to be put in a role that you can’t be successful at.”
Once someone is hired at MTM the company does extensive employee training and engagement.
“Companies that have high employee engagement outperform their competitors, and it’s not just because of that, but because it makes for a great work environment where people want to get up and come to work every day,” she says. “I like to come to work every day, and I like what I do and I hope my whole company feels the same way.”
Employee engagement can’t just be lip service. For employees to truly engage with your company, you have to prove to them that you are serious about having engagement be a part of the business.
“It has to be a priority,” she says. “A lot of times, business leaders are looking at how to save money, and I think it’s a penny-wise and pound-foolish thing not to invest in training and employee engagement because it pays dividends back.
“As a leader you need to focus on giving employees the tools to be successful — training and moving barriers. It’s multi-faceted and there’s no secret ingredient, but it’s open communication with your staff, clear goals for the organization, tools and training, and then recognition for a job well done.”
With many aspects of MTM running smoothly and sights set on further growth, Macia is excited for the opportunities in front of the company, but is waiting for that right time to pounce.
“We are interested in looking at the potential of international growth, but right now we are growing at such a rate that we don’t need to look for additional ways to grow,” she says. “We are growing at about 35 percent a year or more. When that slows down, we’ll look at acquisitions and other ways to grow, but right now we’re focused on organic growth.” ●
- Understand what areas of your business need improving.
- Manage your core product or service growth while finding new opportunities.
- Build and engage the right team to develop your company’s growth.
The Macia File
Name: Alaina Macia
Title: President and CEO
Company: MTM Inc.
Born: Washington D.C.
Education: Attended Washington University and received a bachelor’s degree in biological engineering and a master’s degree in business administration with a focus in finance and accounting.
What was your first job, and what did you learn from it? I worked as a lifeguard and also worked at a restaurant, but the one job that I had that gave me the best experience was working at my mom’s CPA practice. I worked with clients, helped meet deadlines and helped process information for staff. Being 16 and working with the public was a great experience.
Who is someone you look up to in the business world? Sir Richard Branson. I’ve always admired his entrepreneurial spirit and the fact that he believes in large goals. He inspires people to think outside the box.
What is the best business advice you’ve received? The 80/20 rule. Understanding what’s driving 80 percent of what’s going on and ignoring the other 20 percent so you can make vast improvement quickly.
What are you excited about at MTM? I get excited watching my employees engage, grow and have new opportunities.
If you could speak with anyone from the past or present, with whom would you want to speak with? The people I want to talk to are the people who are great at what I’m not great at. Both Barack Obama and Bill Clinton can speak well and engage their audience. That’s a great skill because people who master that can be successful.
How to reach: MTM Inc., (636) 561-5686 or www.mtm-inc.net
After working in executive positions for companies such as Philips Oral Healthcare and S.C. Johnson & Sons Inc., Christine Robins decided she needed a change. Always willing to take risks when it comes to business, she decided in 2009 to leave the comforts of those global companies and take the CEO role at a struggling, venture-backed BodyMedia Inc.
“I wanted to try something different,” Robins says. “I wanted to come into an organization or a business that had an interesting product or business model that needed to get to the next level.”
Founded in 1999, BodyMedia was exactly what Robins was looking for. The company is the pioneer in developing wearable body monitoring systems that are designed to help people lose weight, improve performance and live a healthier lifestyle. Unfortunately, the direction of the company and the purpose of its products weren’t always that cut and dry.
“Early on, the founders had developed a technology and a product that was well before it’s time,” Robins says. “When we commercialized our first product in 2001, this notion of wearing multiple sensors on your body on a 24/7 basis — if you weren’t chronically sick and in a hospital, or you weren’t a performance athlete — was a weird notion. We didn’t even have cell phones in our pockets in 2001.”
The founders spent years trying to figure out what market, customers, channels, and partners this technology and know-how could help assist. It wasn’t until 2008 and 2009 that BodyMedia found a bit of a groove.
“We were primarily focused in the medical and research space early on and in late 2008/early 2009, we augmented the portfolio to also have a consumer-based solution, and that’s when our business took off,” Robins says.
Here’s how Robins helped steer BodyMedia in the right direction and kept the business at the forefront of a budding industry.
From idea to in-demand product
Early in the growth of BodyMedia, the company struggled to understand where its product would fit best. It would be fair to say that BodyMedia had a lack of focus.
“I said, ‘We’re never going to have sustainability or keep the lights on if we continue to just dabble in stuff.’” Robins says. “The founders kept waiting for the market to tell them where the best place was. The challenge with that is if you have an early-to-market technology, the market’s not going to tell you, because the market doesn’t know yet. You have to create a need.”
As a result of waiting for the market to indicate a direction, BodyMedia was all over the board. It needed to place a bet.
“If you’re running a company, you’re making decisions every day that have risk,” Robins says. “But if you’re running a smaller company, you’ve got to place a bet and it’s got to be a focused and well-informed bet. Then you have to go with it and be willing to listen to the reactions of people and figure out how to be a continual learner.
“You have to get a product or service built that satisfies your hypothesis of the market and who you’re going after, and build your messaging and get it to market to get real feedback. You can iterate in an office and give your opinions until you’re blue in the face, but if you don’t put it out in the real world and it doesn’t sell, it doesn’t matter what you think.”
BodyMedia’s technology is a lifestyle management system that helps people manage various health-related conditions. With the help of Robins, the company geared its assets toward delivering a solution that helps people lose weight.
“We picked the weight management market and built a solution that’s solid and works for those people and has the types of things that they need,” she says. “There are a number of chronic conditions it can help, but they all have one underlying key driver, and that’s lack of lifestyle health, and our sensors can help people understand that.”
BodyMedia’s product has an accelerometer and three physiological sensors that have to be in contact with the skin. The product has received clinical validation and has accuracy that’s unmatched in the market.
“If you’re trying to manage your weight, it’s calories in, calories out,” Robins says. “They need that math and they need it simple. We built something that people will wear on a 24-hour basis, because losing weight isn’t just about going to the gym.
“It’s the things you do at home. It’s parking in the back of the parking lot. People don’t manually track that stuff because it’s too difficult to do. If you put a device on and let it do all the tracking and have it present data in software that shows them their targets, it’s much easier.”
BodyMedia’s product has hardware that’s wearable and software that targets a specific user base. The third thing Robins focused on was finding partners — those who people would trust to be committed to the product.
“We started to partner with Jenny Craig, 24-Hour Fitness, health plans and then we put it in select retail stores. We make sure that those retailers are committed to the category, and it’s consistent with where our consumer target would go to look for this product.”
It wasn’t just a clear focus for the product that launched BodyMedia into growth mode. Once the company turned to the consumer market, it had to turn its attention toward making the product more functional and attractive in terms of design.
“It was around form factor and getting something that people would engage with,” Robins says. “Over the years we have gone from a product that was bigger than a hockey puck that you would wear on your upper arm to, by the time I came, an inch and a half square. This year we launched a product that is the size of a quarter.”
BodyMedia saw significant moves in its sales volume as it went away from bulkier products to slimmer models. Its new Core 2 product launch also improved the design perspective, giving the device an industrial, almost jewelry-like feel and look.
“Over the years, we’ve really evolved the form factor,” she says. “As we moved into the consumer arena four years ago, that was a big reason for the uptick.”
Since Robins’ arrival in 2009, BodyMedia has improved its business by leaps and bounds, and has single-handedly been responsible for growing the credibility of the wearable sensor market. Now Robins is focused on the next steps.
“We are continuing to look for new features that we can build into the hardware or the software,” Robins says. “We have four sensors today, and are looking to add a fifth sensor for heart rate.”
BodyMedia has done such a great job in the wearable sensors arena that the company has created a more competitive market.
“That opens the next chapter for this company,” Robins says. “We’ve done what we wanted to do, which was have this category be established as credible.
“We were the first ones in wearable sensors period, back in 1999, but we were serving a different target in terms of the medical and clinical focus. We were the first ones to bring it to consumers in late 2008 and early 2009, and since then we’ve seen a huge influx of competitors.”
Robins’ philosophy about competition has always been that new competition isn’t bad because it does several things.
“No. 1, it gives the category credibility,” she says. “No. 2, it brings awareness to the category. No. 3 is that competition keeps you on your toes. I don’t fear competition. I fear that we can’t continue to innovate and differentiate. Competition makes you be sharp in your decisions, strategy and execution.”
In this category there were a couple of other smaller players, but a year and a half ago, both Nike and Jawbone came into the space.
“That’s when I stood back and said, ‘Yes! This category has arrived,’” Robins says. “When you get players like that putting their marketing muscle into it, you know that they believe this category is in it for the long haul.”
In fact, this past April, BodyMedia announced that it was being acquired by Jawbone, a major player in wearable technology and audio devices. This move gives BodyMedia and Jawbone a leg up on the competition.
“The competition has some barriers in terms of entering this market, some of which are technical and some we’ve created by our patent landscape,” she says. “That’s allowed us to be uniquely positioned in the market.
“Our acquisition gives Jawbone a really nice combined platform that has a single-sensor device that serves certain markets and needs, and the other multi-sensor platform that we have can serve other markets and needs.
“Together we can accomplish far more than we ever could apart. That’s pretty exciting. My immediate focus is to try to get this company integrated, but in parallel, it’s also continuing to drive our strategy and our innovation pipeline with a new owner, assets and synergies we can now leverage.” ●
- Discover where your product or service fits best.
- Get market feedback and make improvements.
- Look for ways to make the leap to the next level.
The Robins File
Name: Christine Robins
Company: Body Media Inc.
Born: Beloit, Wisc., and raised in Green Bay, Wisc.
Education: Double major in finance and marketing from the University of Wisconsin at Madison and a master’s degree in business administration from Marquette University.
What was your first job, and what did you learn from it? I worked in a fabric store in high school. I have been a big seamstress since the time I was 10. What I learned was it exercised the creative side of me.
What is the best business advice you’ve ever received? When I was working at SC Johnson, the CEO at the time was Bill Perez, and I was running various brands for them as part of my marketing capacity. We had to do regular business updates, and I had screwed up. I had made a decision to launch something and it didn’t go well, and I had to go in and tell him.
He looked to me and said, ‘What did you learn? What would you do differently?’ I was prepared for that question, thankfully. He then said, ‘A well-thought out mistake I can tolerate. Just don’t make it again. If you ever place a bet, and it’s not well researched and it fails, then there’s no turning back.’
It was a great lesson of having to take risks in business, but they have to be well-educated and well-informed risks.
Do you use the BodyMedia sensor? Absolutely. I wear it 24/7 because it captures both your activity and your sleep efficiency, and as a CEO, a working mom and a wife, I don’t have much time to sleep. When I look at my data and the reality of it, it has caused me to try to focus on getting more sleep.
Do you have a favorite capability of the product? I like that it tracks sleep efficiency. I call that feature the Cracker Jack prize.
How to reach: BodyMedia Inc., (412) 288-9901 or www.bodymedia.com
For most people, becoming general manager of a $1 billion division of Clorox might be the pinnacle of their career. But for Joy Chen, it was an event that made her see she wanted something more.
With 20 years’ experience in consumer-packaged goods, Chen hoped to work with a smaller, more entrepreneurial, high-growth company. She met with two equity investors, San Francisco Equity Partners and Simon Equity Partners, and really liked the portfolio of companies the firms had in natural products. The two firms saw her as a good fit for a natural beauty products company called Yes To Inc.
“The Yes To brand has been around for close to six years, so it is a very, very young brand,” Chen says. “When this opportunity came up with Yes To, they called me and I started as CEO 3 ½ years ago.”
Yes To is a manufacturer of natural skin and hair care products with annual revenue of more than $50 million. The company had a great mission and a great product, but there were a few matters that Chen saw as obstacles the company would need to overcome if it wanted to be among the top brands on the market.
“I knew that the brand had tons of potential just from looking from the outside,” Chen says.
Here’s how Chen helped open new doors to lift Yes To Inc. into the upper echelon of natural beauty product brands.
When Chen first arrived at Yes To, she wasted no time in creating a plan of attack for the company. She made a conscious choice to get something done quickly.
“During my first 30 days, I assessed the business to see what’s working and what’s not, and assessed the team to see who would add value to what we want to do and who won’t be part of the team,” she says. “It was a lot of assessment of the strengths and opportunities of the business and how we address those in the 30-day plan.”
The thing that was clear to Chen in those first 30 days was a need to focus on product quality. The brand’s products were being manufactured overseas.
“I moved all of our manufacturing to the U.S.,” she says. “This was a U.S. brand and I wanted it to be made in the U.S. and be able to manage the quality a lot better. When I did that I saw it as an opportunity to relaunch the brand under all new positioning.”
Yes To has six different product lines branded under different fruits and vegetables such as Yes To Carrots, Yes To Cucumbers and Yes To Tomatoes. Over the past three years Chen has repositioned and relaunched the entire brand.
“We positioned the product lines to be more benefit-based lines in the brand, whereas in the past they were viewed as flavor and scent differences,” she says. “The cucumber line is now a sensitive line and the tomato line is for acne.
“That repositioning really helped bring a lot of growth to the brand,” she says.
The company also launched new product lines — blueberry, an anti-aging line, and grapefruit, an even-color complexion facial line.
“We repositioned the entire business and launched the blueberry line all within the first nine months I was there,” Chen says. “I coupled that with the manufacturing piece because I thought it was an opportunity to do it all in one big package. From there we were able to get a lot more distribution and our business really grew.”
As Yes To kept climbing the ranks in the natural beauty product segment, the company began to have challenges keeping up with and forecasting growth.
“It was really hard for us to forecast how high is high,” Chen says. “For a small company you can’t just buy all the inventory you need to support that, so we inadvertently had supply issues because our growth was higher than what we projected, and we couldn’t deliver the product as well as we would have liked to some of our retailers.
“That happens when you’re in a small company because you have to manage your cash flow while you’re growing. You really have to balance those trade-offs in a smaller company.”
The second challenge Chen faced was realizing over time that the needs for talent within the team change. What you need sometimes when you first start the company is different from what you need three years later.
“You have to make sure that the people you have on your team a year ago are still the same you need moving forward,” she says. “The skills that you need change as the company changes and grows.”
Aside from tracking talent needs, anyone who runs a small company will undoubtedly get caught up in the day-to-day, but to be successful you must make it a point to look ahead.
“You have to make time to do that and think about what is required to continue to grow the company,” Chen says. “You can’t get complacent.”
With the new positioning, launch of new products and a focus on higher quality, Chen has helped Yes To become the No. 2 natural skin care brand in the U.S. It was previously No. 5. Yes To is also the No. 1 natural facial skin care brand.
“We have opened a lot of doors,” Chen says. “We’ve increased our distribution over the last couple of years with major mass and drug retailers. We’re No. 2 and it’s great, but there’s so much more to do. How do we get to No. 1 or get to be a stronger No. 2?”
Chen’s goal for Yes To is to double the business in the next two or three years. In the last three years, Yes To has quadrupled the business in size and increased the value of the company by five times.
“Doubling the business sounds easy, but it’s going to be a different kind of growth,” she says. “We opened a lot of doors over the last 3 ½ years, and we still have opportunity to open more doors, but we’re going to be more selective about what doors we open.”
For any small business driving awareness is really important for the brand. It’s important for Yes To that consumers are able to find its product.
“One way to drive a lot of awareness in the beginning is making sure that your consumers can find you in the different channels that they shop in,” Chen says. “The various channels and various doors that we’ve opened allow consumers to be able to find us and have experience with our brand.”
From there the growth relies upon the quality of the product and the continued innovation within the company’s various product lines.
“It’s hard for one set of products to do everything, so that’s why we have built them into families,” she says. “Innovation is really important for us because in beauty people love to try new things. They’re always looking for the next, new, better thing. In beauty people have different skin needs and hair needs, so innovation and bringing new technology to your brand is really important.”
The most important thing that Yes To has done for itself is to clearly define what the brand stands for.
“That is a sandbox that we need to find ourselves,” she says. “That’s something that we need to define as our right to win. I don’t believe in the consumer telling us to go somewhere when we don’t believe the brand should go there. You’re trying to create the brand and the equity behind it and you have to define what that is. From there you innovate within that space.”
Since Yes To is still a small, growing company, it doesn’t have large amounts of research dollars, so it relies on the marketplace.
“We tend to look at larger companies to see what’s successful and we rely on data to show how successful certain products are,” she says. “That’s how we saw a huge void in anti-aging in our product family. Anti-aging was a huge segment we were not playing in and it has seen a tremendous amount of growth year after year.”
Once Yes To defined the segment, it looked at who was already doing it well.
“We look at competitors, we talk to our consumers and then we look at what we want the brand to stand for,” Chen says. “The combination of those things is how we come up with innovation.”
Innovation will continue to be a huge part of Yes To’s growth moving forward, and its innovation will have to differentiate the company from other competitors.
“First-to-market innovations that really matter are really important,” she says. “We know that once people try our product they like it. So our biggest challenge is driving more people to try it.” ●
- Find the obstacles holding back your company’s growth.
- Implement solutions and focus on where to grow next.
- Find ways to improve your brand and market share.
The Chen File
Name: Joy Chen
Company: Yes To Inc.
Born: Hong Kong. Chen came to the U.S. when she was 9.
Education: Attended U.C. Berkeley and earned a degree in business administration. She went to Harvard Business School for her master’s in business administration.
What was your first job and what did you learn from that experience? I helped manage five maternity clothing retail stores. I took away the fact that as long as you put your mind to it you can get it done. It was fun to help merchandise the clothing and manage the stores.
Who do you look up to in the business world? Jack Welch. He never settled for complacency, always had really high standards and pushed his leadership team to think outside the box delivering extraordinary performance.
What do you like to do outside of work? My husband and I really enjoy adventure travel. We like to travel to less developed places. We recently went to Bhutan. What we like about going to those places is it brings us back to what really matters in life and away from material things.
Do you have a favorite Yes To product? Blueberry eye cream
How to reach: Yes To Inc., (888) 929-3786 or www.yestocarrots.com
The average age of Sue McPartlin’s counterparts at PricewaterhouseCoopers LLP is 27. That’s roughly equivalent to the number of years she’s been at the Big Four accounting firm. There’s one thing those years of experience at the firm has given her — knowledge — and she’s very proud to share that knowledge with the company’s millennial employees who already make up more than 50 percent of PwC.
“I’ve been here longer than most of our newer hires have been alive,” says McPartlin, who became market managing partner of PwC’s Cincinnati office in 2011. “Because such a large percentage of our employees are millennials, we can’t survive in business if we don’t attract and retain that talent.”
PwC Cincinnati has 210 employees and McPartlin leads an office that is responsible for the Ohio, Kentucky and Indiana region. Since becoming market managing partner two years ago, she has had the growing challenge of leading a multi-generational workforce while also having to compete for the best and brightest talent coming out of college against the likes of EY, KPMG and Deloitte.
“One of our biggest challenges is the competition for talent and developing and retaining that talent,” McPartlin says. “We don’t make any kind of product; we sell services. Our people are our product. It has become fiercely competitive on campuses, as well as for experienced hires. It’s just a different caliber of young talent that we’re seeing these days.”
In a firm the size of PwC, there are numerous opportunities offered to employees who put forth the effort.
Here’s how McPartlin is passing along knowledge to the younger talent at PwC Cincinnati, while also working to retain a multi-generational workforce.
Recruit the best and brightest
On many of today’s college campuses, the competition for a job following graduation has become fiercer than in years past. The competition to attract that talent has also increased for businesses, especially among the Big Four accounting firms.
“It becomes very challenging to recruit and to ultimately retain strong talent,” McPartlin says. “We as a firm just did a global study called a NexGen study looking at millennials vs. non-millennials. We’ve been focused on it for quite a while, recognizing that the next generation of younger employees have different expectations and want different things.”
Those differences in wants and expectations add to that challenge as well. PwC has to make sure it stays current with what younger generations are looking for out of their employer.
“We have to make sure that people who have been around a while, like myself, don’t get embedded in how we grew up in the firm and how things were then,” McPartlin says. “Most of the younger generation doesn’t think they will work for one company their whole career, no matter who it is.”
PwC has always had direct competition for talent among the other Big Four accounting firms, but today the options available to candidates coming out of college are much more than five or 10 years ago.
“That adds to the competitiveness,” she says. “On the other side we have to match our needs and culture with how people want to work today.”
PwC has been around for more than 120 years, so it is imperative that it makes adjustments to be more attractive to the ever-changing workforce coming out of college.
“We’ve been on that journey now for a number of years, and we’re having a lot of success with it,” she says. “You have to stay on top of it, but who knows what expectations of people will be like five years from now. It’s both the true competition with other companies and firms, and the competition to grab the attention of these folks and get them to want to stay and be here.”
The recruiting process starts with getting out to college campuses and getting to know the potential talent you’ll be recruiting.
“It’s about getting to know people on a personal level so potential hires know from a people perspective what they’re getting into,” McPartlin says. “It’s also helpful to have people understand what the culture of your organization is like. That’s really important, and we see that in internal surveys we do of our people, and external data validates that the fit with a culture is really important to people.”
Retain your talent
Within most companies today, workforces are very diverse and expect different things from their employers. No longer does a one-size-fits-all solution keep people happy.
“Our expectation from our people is adaptability and flexibility on their side, but also on the PwC side, and not treating everyone exactly the same,” McPartlin says.
With workforces becoming more unique than ever before, companies have to get creative to retain talent and offer things others don’t, or do a better job offering similar things. PwC focuses on training and development of its employees.
“We offer a lot to our employees in terms of formal training and development,” she says. “Our folks consistently tell us that they think our learning and development is very strong in helping them prepare to do their work. We also offer on-the-job training.”
PwC also puts emphasis on working in team environments, no matter what the work is or in what department.
“You’re always learning from somebody who is a bit more experienced than you,” she says. “Our team members get a variety of clients, which keeps things interesting and they can learn from people with different experiences than they have.
“When we ask people about what they like best about the firm and what keeps them here, they consistently say the people and the ability to team with people and learn from them. That’s one of the key drivers in terms of retention.”
Aside from teamwork, flexibility is another aspect of today’s work environment that younger generations expect to have. Work/life balance plays a bigger role today than it ever has.
“I don’t like the term work/life balance because that implies that it’s always in balance,” McPartlin says. “I view it as scale. Sometimes work takes precedent and sometimes life takes precedent.
“Don’t just focus on that one day that you had to work a lot and didn’t get to spend as much time at home as you wanted. You have to look at flexibility from the bigger picture.”
In a workforce like PwC’s, not everyone is looking for the same things.
“It’s not so much that millennials want different things in a job versus non-millennials, but rather rank those needs in different degrees of importance,” she says. “We’re recognizing that we need to change and adapt to these things.”
Everyone probably can agree on, no matter what generation they’re in, that having different opportunities provided to you is important and desired.
“With a firm of our size and the variety of things that we do from a client service perspective, as well as a lot of the things we need to do to run the firm from an internal perspective, there’s a lot of opportunities out there,” McPartlin says. “I’ve had folks who are on the assurance staff, but move into marketing and sales, and then come back to assurance. Some folks move permanently into those roles because they were able to try something different.”
The other point McPartlin and PwC emphasize to employees is encouraging them to step out of their comfort zones.
“They have to know that the leadership and the partner group will support them in doing that,” she says. “When most people have any angst about moving on to a different role or department, they want to know they’ll be supported.”
The third thing that builds goodwill with employees is making sure they are offered opportunities even if they don’t take them.
“That lets them know that you think highly enough of them that you want to offer them that next role and next opportunity. That’s really important,” she says. ●
- Understand the talent currently coming out of college.
- Offer benefits that will attract millennials and retain current employees.
- Provide opportunities to your workforce to drive retention.
The McPartlin File
Name: Sue McPartlin
Title: Market managing partner
Company: PricewaterhouseCoopers Cincinnati office
Born: Mount Clemens, Mich.
Education: Attended Walsh College and received a bachelor’s degree in accounting.
What was your first job, and what did you learn from it? I ran a 20-ton plastic injection molding press. I worked in a factory all summer long making plastic car parts and refrigerator parts. It was really hard working in a factory and it was really hot because you were working with plastic and injection molding. It was good money as a college student, but it made me realize this wasn’t what I wanted to do for the rest of my life and that I wanted to finish college and get my education.
Who do you admire in the business world? There are a number of client company executives that I have looked up to over the years. I also just read the book, “American Icon: Alan Mulally and the Fight to Save Ford Motor Company.” Based on that book, Alan Mulally is obviously a very inspirational leader.
What are you excited about at PwC? Specific to Cincinnati, I think we have a lot of future growth opportunities here. That excites me as the leader of this marketplace. From a broader perspective, we are very focused on delivering the best both to our people and to our clients, and I see that as being impactful and exciting.
How to reach: PricewaterhouseCoopers LLP Cincinnati office, (513) 723-4700 or www.pwc.com
Robert Chapman has always been intrigued by the game of business, so to speak. At the highest level of that game is the ability to blend both organic growth initiatives with successful acquisitions to create a stronger organization. Chapman takes that blending further and ensures that his company emphasizes people, purpose and performance.
Chapman is chairman and CEO of Barry-Wehmiller Cos. Inc., a 7,000-employee, more than $1.5 billion global supplier of manufacturing equipment and services. In 2012 the company made four acquisitions and plans to do several more throughout 2013.
“We’ve been very purposeful in looking for companies which align with our value propositions,” Chapman says. “Most people look for great management and great industries. We look for companies that face issues or have opportunities that align with our experiences.”
Chapman is combining those acquisition efforts with organic growth initiatives to help create value for the company and its customers. He relates what Barry-Wehmiller has to what great sports teams do on the field.
“When sports teams go out and execute play patterns, and it almost looks easy, it’s because everybody knows their position and what they’re trying to do relative to the defense and how they’re going to advance the ball for either short-term gain or long-term gain,” Chapman says. “Our goal in our organization is to have play patterns, or strategies that allow us to create value and that everybody knows and embraces their role in that vision.”
Here’s how Chapman keeps Barry-Wehmiller ahead of the game in business.
Have a growth strategy
Beginning about 10 years ago, Barry-Wehmiller began a leadership process it calls visioning, which was an alternative to traditional budgeting and the incremental thought process.
“About 10 years ago we said to one of our divisions that was involved in this incremental budgeting, ‘What if the future was only limited to our ability to recruit and integrate competent people into a good business model? What would it look like?’” Chapman says. “That opened up a whole new way of thinking.”
The company thought it could grow at almost 10 percent a year if that were the case.
“It led to a thought process, this visioning process of where are you going, why do you want to go there, and when you get there, what will you have created of sustainable value,” he says. “That division went from modest growth to significant growth because the division began visioning their future as opposed to budgeting their year. That’s a transformation that’s occurred in the last 10 years that every year we get better and better at creating long-term goals three years out.”
That thinking has allowed Barry-Wehmiller to focus on a three-year horizon for each of its nine business units.
“It’s a very reflective, thoughtful learning process to try to continually envision,” Chapman says. “It’s created this organic growth vitality that’s combined with our acquisitions, because it includes visualizing companies that you’d like to acquire to improve the balance of your business.”
Visioning has accelerated in the last few years and the company is now in the flow of that way of thinking.
“It’s not what are you going to do this quarter or the next six months — it’s where are you going, why do you want to go there, and what have you learned that will help make the future better,” he says. “We share that with everybody. That visioning process allows for a very purposeful, focused organization that understands where they’re going.”
The second aspect the company adds to visioning is something it calls people, purpose and performance. It starts with a fundamental concept that the company’s primary focus is on the lives entrusted to Barry-Wehmiller every day.
“Are we good stewards of the 7,000 lives entrusted to us every day to help us achieve a common purpose?” Chapman says. “Is our purpose something that we can share that will inspire people to fully share their gifts? It’s all about gathering people around an inspiring purpose and then we’ve got to perform and create value.
“Each one of those is interdependent. People are not going to share their gifts with us unless they’re inspired, and unless we perform we can’t afford to be good stewards of the lives entrusted to us.”
Find the perfect acquisition
One way Barry-Wehmiller ensures it’s a good steward of the lives entrusted to it, is by increasing performance and growth through strong acquisitions.
“Acquisitions are part of our DNA,” Chapman says. “Our business at more than $1.5 billion is a combination of more than 60 acquisitions. The initial 15 years our growth was fueled by the brute force of acquisition. The last 10 years has been fueled by our focus on being good stewards and allowing people to share their gifts and rewarding people for doing so.
“The game of business is played at the highest level when you can do both organic growth and acquisition growth and blend them together. You have to be very disciplined in terms of making a responsible investment and see how bringing two organizations together makes both of them better.”
Over the past 25 years, Barry-Wehmiller hasn’t sold any of its companies.
“It’s probably one of the few cases that anybody can say that,” he says. “It’s like adopting children and then getting rid of them if they get to be better kids. Why would you sell a business if it’s a good business? If it’s a bad business, why would you pay somebody else to fix it? Why don’t you fix it?
“We’ve never even entertained selling a business, and that’s why when we have the chance to acquire a company, people feel the confidence that they’re a part of an organization that wants them, and they’ll be a part of that for the indefinite future.”
Chapman says the key to a successful acquisition is knowing whether you’re making the right investment up front.
“You have to be very purposeful in what you look for and make sure that with the investment you make, you clearly see how you’re going to make it financially meet the criteria your investors expect,” he says. “Make sure you clearly see the path to get that return because for people who make investments that don’t meet criteria, it becomes demoralizing. Again, you have to have a vision where you’re going, why you want to go there, and why when you get there, you’ll have something that’s sustainable in the future.”
Once you acquire a company you have to remain disciplined to realize the potential you saw in that acquisition.
“Being disciplined means you’re going to pass on a lot of deals, but you have to have that discipline,” Chapman says.
“You also have to make sure that the team you lead is committed to that value creation initiative. There is a pretty high failure rate for acquisitions, which is not a good thing for the investment of shareholder funds. A lot of people don’t have good discipline.”
Despite a large number of acquisitions not panning out for many organizations, the acquisition process is very exciting.
“Nobody likes to be acquired, but everybody loves to acquire somebody else,” he says. “It’s motivational, and it’s a great professional challenge. When I started doing acquisitions in 1984, I did it during a time when the company was financially thin and therefore I couldn’t afford to fail.
“I didn’t have the luxury of saying, ‘Whoops, that didn’t work out, isn’t that a shame?’ If it didn’t work out I died. We were that thin. I began doing acquisitions when failure was death, so our DNA of acquisitions is don’t do them unless you know they are going to be successful.”
While Barry-Wehmiller was driven early on by a strong value-creating business strategy, in recent years that success has been enhanced by grasping the significance of the cultural impact business makes on people’s lives.
“You have to focus on the people in harmony with the vision so that we are creating value for all stakeholders and not just shareholders,” Chapman says. “We are taught in business school and in the business environment that people are necessary to achieve our goals. The way it should be looked at is along our journey of life we have the chance to invite people to join us to create something of significance that creates value for everybody.”
Leadership is the profound sense of responsibility over the lives to which you have an impact in your role.
“You have to see those people as somebody’s precious child who wants a life of meaning and significance, and you have a chance to give them that by the way you treat them in the environment of the work,” he says. “Eighty-eight percent of people feel they work for a company that doesn’t care about them and they’re right. You have to look at the people that you invite to join you as if they are your own children.
“Barry-Wehmiller is being recognized more every day as a unique, powerful business model that we evolved through this eclectic journey we’ve been on and it is going to encourage others to embrace human leadership.” ●
- Have a growth strategy to know where your company is going.
- Combine organic growth with acquisitions.
- Treat employees well so they in-turn perform well for the company..
The Chapman File
Name: Robert Chapman
Title: Chairman and CEO
Company: Barry-Wehmiller Cos. Inc.
Born: St. Louis
Education: He attended Indiana University and received a bachelor’s degree in accounting. He received a master’s degree in business administration from the University of Michigan.
About business: Business ignited my mind. I fell in love with business as a game.
What was your first job, and what did you learn from that experience?
My first job was working at Combustion Engineering in the Boilermakers Union in St. Louis. I had to join the union and work in the plant as a welder’s helper. Being in that culture I learned how people think and what it was like to punch a time card and be told what to do every day. It was an incredible experience to work in the production environment.
What is the best business advice you’ve received?
In 1982 and 1983 our senior director was a man named Bob Lanigan. We had to make tough decisions because the company was fragile financially and under tremendous stress and Bob used this analogy that I’ve used for years. He said, ‘When you’re in a DC-3 airplane and you’re trying to go out west, and you’re coming toward the Rocky Mountains and your pilots say to you, “Team we need to cross the Rocky Mountains but we’re losing altitude and unless we drop some weight, we’re not going to clear the mountains.” In an environment where you’re going to die unless you lose some weight, your priorities are not very clear. When it’s clear that you want to end up clearing the mountains, your priorities become clear.’ That clarity of thought caused us to prioritize what was important and what wasn’t important.
If you had the opportunity to invite any three people to dinner, who would you invite?
Jesus Christ, Ronald Reagan and Ken Blanchard.
How to reach: Barry-Wehmiller Cos. Inc., (314) 862-8000 or www.barry-wehmiller.com
Jorge Titinger’s first day as president and CEO of technical computing leader, Silicon Graphics International Corp. was Feb. 27, 2012 — and the next day, instead of having time to ease into his new role, he was telling investors about the company’s shortcomings the quarter before.
“There were a lot of questions about the direction of the company, why the miss happened and why it was not visible to the prior leadership team,” Titinger says.
What happened the prior quarter, was that the company reiterated guidance in early December 2011. The then CEO left in mid-December and the chairman of the board stepped in as acting CEO. By the time the books were closed and the earnings were announced, the company did not meet guidance.
“Even though it was reiterated less than a month before the end of the quarter, the actual results were worse, from an earnings perspective, than had been expected,” Titinger says. “That coupled with the departure of the leadership produced some significant concerns in the investment community.”
While Titinger was new to his CEO role, he wasn’t unfamiliar with SGI. He had worked for the company, which delivers high performance computing, server, storage, data center, cloud computing solutions and professional services, a few decades prior and had a good grasp of the organization.
“I had the luxury of being able to do a pretty detailed due diligence before joining, so I had some level of understanding of what needed to be done,” Titinger says of the more than 1,400-employee, $753 million company. “I was able to focus on talking to the investment community about what changes were necessary to get the company back on the right track.”
Following the investor conference, Titinger had to develop a plan to move SGI forward.
“It was a great way to come into the company by facing the folks that I need to keep talking to in the future,” Titinger says. “While it was a little adversarial because the results that the company had achieved the prior quarter were not what they were expecting, these are people who want to see what we are planning on doing, how we are turning things around, and they’ll be cheering for us. That’s how I approached it.”
Here’s how Titinger came into a struggling SGI and got the company on the right track.
Find what needs fixing
To better understand why the company wasn’t performing up to snuff the quarter before Titinger’s arrival, he spent the first several weeks and months diagnosing issues that needed to be fixed.
“I spent a lot of time traveling, meeting with customers, meeting with suppliers, and meeting with the different groups inside the company to get more clarity on the cause and effect of the issues we had to fix,” Titinger says.
After coming into the company, he realized there were certain business practices missing. Without those practices in place, it wasn’t a surprise that the results were unknown.
One of his commitments to SGI’s board of directors was to develop a strategic plan within three months that would guide the company down the path it needed to follow.
“The diagnosis involved a number of areas: How good are our products in the markets that we’re competing in?” he says. “How good are our processes? Is our strategy the right strategy? Are there relationships with customers at the right level? And lastly, is our team the right team?
“I had spent the early part of my tenure here making sure we had clarity in those areas and where to develop action.”
A lot of the initial focus that Titinger had in the turnaround was putting those business practices in place.
“My diagnosis of the business was that there was a misalignment between structure of incentives and the objectives that the company had, especially with the sales force that was incented on bookings only, and we were too complex for the size that we were,” Titinger says.
“SGI today is a combination of the old SGI and Rackable Systems Inc., and the combined company is still quite a bit smaller than the old SGI used to be, but many of the business practices and processes were from a much larger, complicated company.
“So we have spent a lot of time in this past year simplifying what we offer to the customers, refocusing on certain vertical markets instead of trying to be everything for everybody,” he says.
“The essence of the plan is focus, simplify, be able to deliver more value to a narrowed set of customers, and then clean up the internal processes to make sure we don’t get in our own way when we’re working on behalf of fixing customers’ problems.”
The No. 1 thing that helped Titinger identify SGI’s trouble areas was his ability to listen.
“The tendency to come in with prefabbed solutions will be high,” he says. “Anybody who’s gotten to the CEO level has had lots of successes and there’s a danger in thinking every problem can be solved the same way. I would caution people to not just start applying your tool set into the situation, but spend time listening and keep an open mind so you learn what is relevant in this particular situation.”
Take the next steps
The next step, after identifying issues in the business that needed fixing, was to focus on three things.
“One was to set the strategy,” Titinger says. “I view this as a key role for the CEO. You’ve got to set the strategy. You’ve got to drive the culture in the company that will be able to execute that strategy, and then you have to have the right team in place.
“My next steps were exactly down that path. Who are we going to be and what are we going to do? We had to shift the mood from despair to a can-do attitude. That was buried in the company a little bit, so we had to make that come back up. And then we had to strengthen the team significantly given the task we had to go fix.”
Titinger had spent a lot of time talking to customers and employees who served customers — so that’s where the strategy focused.
“If the strategy doesn’t start with the customer, chances are you’re going to have a hard time with market relevance,” he says. “Based on those conversations and that analysis, the focus was where we can differentiate and provide value-added solutions to customers.
“We then mapped our markets from the perspective of where we could bring differentiated value, but at the same time, determine if they were markets that had growth and where we thought we could succeed. We then narrowed down the market focus and narrowed down the product offerings to support those markets.”
Titinger made sure he involved not only the executive team, but people deeper in the organization who needed to execute this strategy during the development process in order to make it successful.
“Strategy serves two purposes — No. 1 is for the company to understand how it can bring differentiated value,” he says. “Everything the company does has to support achieving that. Equally important is what you’re going to stop doing so you can dedicate your resources to those things that you need to do really, really well.”
One of the biggest problems companies may have is saying no to things that either have been going on in the past or are great ideas, but are ones that don’t add value to customers.
“That is the hardest part in the strategy when you’re figuring out what not to do,” Titinger says. “It comes back to the customer. You can have a great strategy that looks great internally, but if it’s not interesting to your customers, it’s going to be irrelevant.”
Deliver on the strategy
With an internal goal of three months to deliver a strategy to the board of directors, Titinger started in March 2012 and in May presented the strategy. Endorsed by the board, the strategy was presented to investors in June.
“The strategy in the end really had three pillars,” Titinger says. “No. 1 was simplification of our focus on vertical markets and product offerings. No. 2 was a shift from an infrastructure provider to being a solution provider as a company, and No. 3 was operational excellence to improve those processes that were not necessarily the right ones.”
Today, SGI is right on track with the strategy and ahead of plans on the operational elements, spot-on with the simplification elements, and making the kind of progress Titinger wanted to make.
“Given that we’re on track and maybe slightly ahead on the execution of the plan, my assessment of the company is that we have done very well,” he says. “We have turned the company back to profitability within two quarters. We’ve gone from thinking we needed to raise cash to actually generating cash.
“We have a much more focused product roadmap that addresses market needs. We’ve improved the quality and capability of the senior team and that has long-term positive effects for the future of the company.”
With the new strategy in place, SGI employees are enthusiastic and see a path to success.
“I’m excited about the possibilities the company has to add value to our customers,” Titinger says. “I want our investors to view us as one of their best investments, our customers to view us essential to their success, and I want our employees to view SGI as the best place they can be.” ●
- Understand where the issues are in your company.
- Design a strategy to fix the problems.
- Deliver on launched initiatives to make a better company.
The Titinger File
Name: Jorge Titinger
Title: President and CEO
Company: Silicon Graphics International Corp.
Born: Lima, Peru
Education: He has a bachelor’s and master’s degree in electrical engineering and a master’s degree in engineering management from Stanford.
What was your first job, and what did you take away from that experience?
I’m in high-tech by accident. I came to Stanford and studied electrical engineering. I played for the soccer team all four years and played in the North American Soccer League after college. Then the league went bankrupt in 1985 and that’s when I went back to school. I also played soccer on the U.S. Indoor National team from 1988 to 1993.
That was a tremendously fun time. I learned a lot from the world of sports that is relevant to the world of business such as teamwork and feedback. The early parts of my career were divided between running around chasing a ball and going to the office.
What position did you play in soccer?
I played center forward.
Do you still play?
Yes. I have a saying, ‘The older I get, the better I was.’
Do you have a favorite player?
In my office I have a picture of Pele, but today I think Leo Messi is out of this world.
What is the best business advice you’ve ever received?
I had a mentor who used to say, ‘Mood is everything; the rest is just details.’ I find that to be incredibly relevant. The other piece of advice is that there is no substitute for hard work.
Who do you admire in business?
I started my career at HP and I have studied the path that both Hewlett and Packard took. Those two are people to learn from and admire. They were relentless about driving profitability and doing it by adding value to customers. For me that has always been a guiding principle.
How to reach: Silicon Graphics International Corp., (510) 933-8300 or www.sgi.com