When Jerry Burris came to Associated Materials LLC as its new president and CEO in 2011, he joked that he didn’t care whether employees used duct tape, primer or Band-Aids to improve the company’s products, so long as improvements were made. As a certified Six Sigma black belt and Lean practitioner, Burris would never want his employees resorting to quick-fix solutions, but since his arrival, he has been influencing a change in thinking.
Burris wants to get employees at all levels of Associated Materials looking for ways to continuously improve the business.
“Associated Materials is an unbelievably good company,” Burris says. “When I came here, it wasn’t a turnaround story — it was a good to great story.”
Associated Materials is a more than 3,000-employee manufacturer of exterior building products that has annual revenue of $1.2 billion through its Alside, Gentek, Revere, Ultraguard, Preservation and Alpine brands. The 66-year-old company needed to gain better consistency in growth, earnings and processes across the business, so the decision was made to implement a Lean system the company calls the Associated Materials Enterprise System or AMES.
“It’s a cultural change implementing Lean Six Sigma,” Burris says. “It’s not the flavor of the month or the soup of the day. It really takes a cultural change, a mindset change, for people to get in the habit of practicing Lean.”
In its second year practicing Lean, Associated Materials is launching a new window line in the first quarter of 2014 that represents the company’s biggest investment in 20 years, but it still has a way to go to encompass all that Lean has to offer.
“We are in the second inning of a nine-inning baseball game,” Burris says. “We’re early in those stages.”
Change your thinking
Burris was interested in being the fifth CEO at the 60-year-old company because of its legacy and the intimacy it has with its customers, but it wasn’t the only reason. His own history was a factor. He saw the opportunity to bring Six Sigma and Lean to Associated Materials.
“That was highly appealing to me,” Burris says. “The primary focus, whether it’s product, manufacturing or quality, is to have predictable, repeatable processes throughout your business. The beauty of AMES and Lean in particular is it’s an empowerment tool from the shop floor all the way up to the C-suite.”
Associated Materials isn’t looking for perfection when it does kaizen events or continuous improvement events. Burris and the company are looking for incremental improvements.
“That initial outcome from focusing on that process to reduce waste, improve quality or improve service delivery may not be perfection,” he says. “The whole point is you get someone who works on the line every day, the line supervisor, the plant manager, the senior VP of operations and cross-functional people all engaged and helping to improve that process, and ultimately delight the customer.”
Since Associated Materials was already in good shape when Burris came onboard, he was able to focus on making the company even better, which involved creating consistency in terms of growth and earnings.
“That’s why we made the investment in AMES,” he says. “We’ve focused our attention in our manufacturing, supply chain and operations processes, and we’re moving it further into our enterprise.”
That consistency is crucial in a business that operates in the housing industry. Since housing is cyclical and new residential housing is even more volatile, Associated Materials’ business is about 70 percent repair and remodel and 30 percent new residential construction.
“We like that because repair and remodel is not as volatile,” Burris says. “We have felt the ebbs and flows of being in the housing market. You need sustained improved performance and AMES is a key enabler.”
Believe in the strategy
As a 20-year veteran of General Electric, Burris knows that continuous improvement starts at the top.
“That commitment and dedication to really changing or enhancing the culture of a company has to start at the highest level of the organization, and we’re certainly fully supported and backed by our board and financial sponsor.”
From the CEO to the leadership team and beyond, a change like what Associated Materials is going through requires buy-in.
“You’ve got to have strong buy-in from your leadership team because in many cases it may mean a change in either their daily, monthly or quarterly practices,” he says. “It also requires an investment in people. We’ve fused and enhanced our organization by adding quality leaders trained in Six Sigma. We’re supplementing what this company has done for 66 years quite successfully.”
However, anytime you drive change you’re going to have a group of people who aren’t familiar with it or are resistant to it.
“The key is to get all constituents on your team,” Burris says. “I didn’t choose a steering committee of people who were all advocates of Lean. I included people who were a little resistant to it, because if I got them under the fold and committed to the vision, then I was going to pull others.”
Once Burris had everyone on board with the new direction of the company, he wanted to be able to deliver consistent service and consistent quality to customers.
“If any initiative that you drive across your enterprise has a positive impact on customers, it’s going to be sustained and you’ll be rewarded for it,” he says. “All our initiatives are vetted by asking ourselves, ‘What impact will it have on our customers?’”
To gauge what customers think of Associated Materials, the company does an annual net promoter score assessment. Companies that are best in class generally have net promoter scores of 60. Really good companies have scores in the 50s.
“I was pleasantly surprised that this company has a best-in-class net promoter score,” he says. “That being said, we don’t ever want to rest on our laurels. We know that we have to continue to improve ourselves and that’s where AMES comes into play. That’s why it’s such a well-woven initiative across our organization, because we’re constantly looking for ways to improve our customer’s experience.”
AMES fits hand in glove with that mission because it allows employees to take feedback from the company’s net promoter score and incorporate that into the different kinds of kaizen events Associated Materials does to help impact and positively influence its customers and their experience with the organization.
“There’s always something you can improve,” Burris says.
In conjunction with AMES and the company’s new focus on continuous improvement, Associated Materials made its biggest investment in 20 years by launching a new platform called its Mezzo and Fusion window product lines.
“We’re really, really excited about it because it’s our first major new product we’ve introduced using the AMES process,” Burris says. “It’s a major multi-million dollar investment that launches in the first quarter of 2014.”
These new windows are very unique because the company has worked to make these products comply with Energy Star standards that won’t take effect until 2015.
“Energy Star is a voluntary program that is supported and administered by the EPA,” Burris says. “Although it is a voluntary program, our research suggests that when consumers are making a purchase decision for windows, 75 percent of those consumers indicate energy and energy efficiency is important criteria for making that decision.
“It’s part of our mission and vision statement that not only do we want to produce exterior building products that are aesthetically appealing, but are energy efficient.”
Associated Materials views the window as being the first finished good or finished appliance that is installed in a new home. The company’s new window line will be an industry-leading product.
“The challenge is keeping the home cool in the summer and warm in the winter,” he says. “You have to have an insulated glass that protects homes from that. You want to let light in, but the cost of that light is having some sort of thermal barrier or protection.
“We’re going to be industry leading, and we’re excited that a company headquartered in Ohio will be a leader in our industry. It’s got enhancements and aesthetics that we’re pretty excited about.”
While the launch of the new product line will be top of mind for Burris and Associated Materials in the beginning of 2014, there are several other things the company must remain concentrated on moving forward.
“The next step is taking our operations and service delivery to the next level in terms of continuously trying to improve quality service delivery and overall customer experience that they have taking our products to the market,” Burris says. “No. 2 is sustained performance, whether it’s our top line or bottom line.
“Last, but certainly not least, are our employees. We want employees of Associated Materials to have a positive experience and be proud of working for a company such as ours.” ●
How to reach: Associated Materials LLC, (800) 922-6009 or www.associatedmaterials.com
Implement continuous improvement programs.
Drive improvement from the top down.
Practice improvement programs in your products or services.
The Burris File
Name: Jerry Burris
Title: president and CEO
Company: Associated Materials LLC
Education: He earned a bachelor’s degree in electrical engineering from Purdue University and a master’s degree in business administration from Northwestern University’s Kellogg School of Management.
Past job experience: Prior to joining Associated Materials, Burris held management positions at Barnes Group Inc. as president of Precision Components from October 2008 to May 2011 and president of Barnes Industrial from July 2006 to September 2008.
Previously, he served in various management roles at General Electric Corp. over the course of 20 years, including president and CEO of Advanced Materials Quartz & Ceramics in 2006; general manager of Global Services for GE Healthcare from 2003 to 2006; and general manager, Global Sourcing, GE Industrial Systems from 2001 to 2003.
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Few companies today consider the vacuum cleaner market as an area to grow and expand business. That market four or five years ago, however, was very interesting and caught the attention of executives at Euro-Pro Operating LLC, a Newton, Mass.-based pioneer in innovative cleaning solutions and small household appliances.
The company looked at the market at the time and noticed it was divided into two segments. There were well-entrenched brands like Hoover, Bissell and Eureka selling at low price points, under $100. Then Dyson came into the market and become the No. 1 brand selling vacuum cleaners at more than $400.
“It presented a very unique opportunity,” says Mark Barrocas, president of Euro-Pro. “As we looked at the market, we had a compelling strategy within the vacuum cleaner market where we felt consumers wanted lightweight, more-maneuverable vacuum cleaners than what were present in the market at that time, and they wanted it at affordable prices.”
Euro-Pro entered the market with its Shark cleaning appliances in the $150 price-point range, a challenging arena that the marketplace called no-man’s land.
Here’s how Barrocas and Euro-Pro turned no-man’s land into a billion-dollar business.
Find new markets
Five years ago when Euro-Pro was looking at entering the vacuum cleaner market to grow its business, the company considered three keys to being successful.
“We looked at Euro-Pro’s capabilities, competitor weaknesses and marketplace opportunity,” Barrocas says. “We looked at how those three things converge with each other and the center point of how those converge on each other was where the product innovation or the opportunity was for us.”
Euro-Pro had the technology to make vacuum cleaners that were lighter-weight, more versatile and were able to deep-clean carpets better than the competition.
“When we looked at the competitor weaknesses, we looked at the fact that competitors were making heavy vacuums,” he says. “And the marketplace opportunity was a huge spread from $100 vacuums to $400 vacuums. As those three things converged, it presented an interesting white space for us.”
The company took its findings in the vacuum cleaner market and began to transform its own product.
“You can’t innovate based on looking at what everyone else does and trying to incrementalize,” he says. “You have to find your own white space where you’re going to be able to differentiate and create a unique proposition for the consumer.”
Euro-Pro heard from consumers that no matter how much they vacuumed their home, there were still issues with their vacuums getting their homes clean.
“These were issues where we looked at consumer problems and we created technology solutions to those problems,” he says. “Then through our media strategy, where we spend more than $100 million on TV advertising a year, we were able to educate the consumer on why this technology would be of strong benefit to them in their home.”
Create new innovation
Not only did Barrocas and his team want to educate consumers about their new vacuum product, they wanted consumers to educate the company itself for innovation purposes.
“Innovation for us comes from a lot of different places,” Barrocas says. “It’s being able to take a lot of different insight and data points and synthesize it down into a hypothesis. A tremendous amount of work goes into building that hypothesis. That insight comes from our capabilities, the competitor’s weaknesses, the consumer insight and the market opportunity. That all synthesizes down into a product innovation hypothesis.”
The company then takes that hypothesis and starts to move it forward into prototypes. Those prototypes are then given to consumers to test.
“We go out and talk to consumers and observe consumers using, interacting and commenting on those prototypes,” he says. “Based on that, we continue to refine our hypothesis and concept until it goes down a product innovation funnel that ultimately leads us to a product we feel good about moving forward with in the market.”
If there is a key to what Euro-Pro tries to do, it’s that the company doesn’t marry its product hypothesis.
“Our hypothesis is not a religion; it’s just a hypothesis,” he says. “If it proves out and there are enough data points that force us to think differently about it or change it, we are very quickly able to do that without feeling constrained.”
If you look inside Euro-Pro, some of its biggest successes have come from projects that have failed or been scratched.
“We try not to throw the baby out with the bath water and try to find the nuggets of things that were good or positive about what we developed and then build on them in some other way,” he says.
In addition to the company’s attention to the innovation process, it also spends quality time educating consumers and listening to their needs.
“All too often there are amazing products in the market, but one of the challenges to consumer products companies is to educate the consumer about what is unique about their products,” Barrocas says. “When you walk through a Target or a Wal-Mart, there are tens of thousands of products on the shelf. Challenge No. 1 is how do you get to the retail shelf. Challenge No. 2 is getting off the retailer shelf and into consumer homes.”
That’s where Euro-Pro takes a unique approach to things. Many companies in its industry focus on the buyer or retailer. Euro-Pro focuses on the consumer.
“What does the consumer need?” he says. “What does the consumer want? What is going to excite the consumer? Then, how do we use TV advertising and the Web to educate them on what we’ve done?”
The company has an interesting go-to-market business model where it advertises significantly on television. In fact, Euro-Pro is the largest appliance advertiser on television.
“We create consumer demand through TV advertising,” Barrocas says. “A portion of that demand is fulfilled directly to us, and we ship products to consumers. However, 90 percent of the demand is fulfilled through retail stores such as Macy’s, Bed, Bath & Beyond and Wal-Mart.
“Our business model is really based on three core principals — one of which is product innovation, second is product quality and the third is creating consumer demand. Our view of the world is how do we bring those three things together to ultimately create a solution for the consumer?”
If you’re going to shop today for a vacuum cleaner, the odds are that a majority of Americans are going to go online and look at consumer reviews.
“As we started our vacuum cleaner business five years ago, we were focused on making sure we were driving exceptional consumer satisfaction,” he says. “We want to see five-star ratings online about our products. Over the course of the last five years, we’ve driven very high satisfaction levels to the point where over the last two years our Shark vacuum brand is rated the most recommended vacuum in America.”
The growth of Euro-Pro and the Shark brand has really been driven by a strong focus on redefining markets that are in place. The company has gone from 1 percent share in the vacuum cleaner market five years ago to 23 percent market share today. At the price point between $130 and $250, the company holds a 70 percent market share, and at an even deeper level, it has 90 percent share of the steam-cleaning category.
In five years, Euro-Pro has developed into a 600-employee, more than $1.2 billion company.
“We’ve been able to take share in some very well entrenched markets,” Barrocas says. “I think our business model and product innovation approach has demonstrated to be scalable, and there are a number of additional categories for us to be able to scale that across.” ●
How to reach: Euro-Pro Operating LLC, (800) 798-7398 or www.sharkclean.com
When a company develops an innovative product that is superior to its competition and has applications in multiple industries, chances are it’s on its way to success. That is certainly the case for MesoCoat Inc. and Andrew Sherman, president and CEO.
MesoCoat is a venture-backed nanotechnology materials science company fast becoming a world leader in metal protection and repair through its revolutionary long-life coating and high-speed cladding technologies.
Through partnerships with the Departments of Defense and Energy, and leading oil and gas companies, MesoCoat, a more than 60-employee manufacturer, is growing at a pace that earned the company the No. 15 ranking out of 100 manufacturers in the Inc. 500/5000 list for 2013.
“MesoCoat was formed in 2008 to bring innovation to the market and make metals last longer and combat wear and erosion in advanced metals,” Sherman says. “With our products, we try to address the entire value chain, cradle to grave.
“For the fabricator, it means reduced fabrication costs and higher margins. For the OEM or the user, it means a longer life and less downtime. For society as a whole it means less environmental pollution, less carbon dioxide and less waste byproducts.”
Here’s how Sherman is keeping MesoCoat on pace with its growth potential.
Keeping pace with growth
With rapid growth comes a lot of leadership challenges and Sherman has been focused on matters such as capital and people.
“How do you take these high-tech industrial things and make them of interest to the financial community?” Sherman says. “Also, going from a 20-person company to a 60-person company, there are a lot of communication issues and organizational development issues. You have to build in more and more communications in order to keep everyone moving in the same direction.”
For Sherman and his team at MesoCoat, the big challenge is constantly shifting investor or financing focus versus organizational growth and infrastructure, as well as an internal focus versus the industry or customer focus.
“Keeping all three of those balls in the air is the challenge,” he says. “You have to balance those and not get over involved in any one of those. It’s spending enough resources to get it done, but not so much that it’s distracting from the other two. If any one of those gets out of balance, you stop.”
Find new opportunities
MesoCoat’s growth has been evolutionary in nature. One thing has led to another, and Sherman has been focused on where the company can go next.
“We started with a materials development platform, which was more exploratory, and we discovered this 80-fold improvement in wear resistance,” he says. “Then we looked at how we could actually enter the market, where we could enter the market and create value and generate return, and that’s where MesoCoat came about as part of that demand creation and positioning in the marketplace.”
As MesoCoat has grown its role into additional services and become closer to the customer, there have been more opportunities.
“Originally, we were focused on aerospace and defense,” Sherman says. “When we got into that and looked at some of the drivers of what’s limiting the adoption of chrome alternatives and advanced coating technologies, it came down to productivity.”
This issue led MesoCoat to see a need in oil and gas, and with that growing segment of business and the success of Particulate Composite Powders (PComP), the company has been able to expand its markets and product lines.
“All our opportunities are based on being close to the customer and understanding what makes a difference in your customer’s or user’s life,” Sherman says. “With MesoCoat, a lot of our growth has been finding where in the value chain you’re creating the greatest value and focusing there. We’re technology guys, and we’re swinging for the fences.”
How to reach: MesoCoat Inc., (216) 453-0866 or www.mesocoat.com
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The recent real estate crisis has left cities, towns and neighborhoods with real potential as well as real problems. Alan Jaffa and Safeguard Properties see both the potential and problems as growing business opportunities.
Founded in 1990 by Robert Klein, Safeguard Properties has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest to the largest mortgage field services company in the country today.
“I’m not going to dismiss the fact that the housing crisis had an increase in our volume,” says Jaffa, who became Safeguard’s CEO in May 2010. “Some have said, ‘Wow, Safeguard. You got into this business at the right time.’ We’ve been in this business 24 years and we’ve seen growth every year. We’ve seen growth over the last handful of years due to new clients, an acquisition and an increase in volume because default rates have gone up.”
Providing services in all 50 states, the Virgin Islands and Puerto Rico, Safeguard employs 1,700 people and is supported by a nationwide vendor network trained and qualified to perform a full range of inspections, property preservation services, maintenance work, and repair and rehab services.
The more than $1 billion company sits atop its industry, and Jaffa is continuing to find ways to keep the company in the No. 1 spot.
“The timing of the shift of me becoming CEO was an interesting time in our industry,” Jaffa says. “Safeguard has always had phenomenal growth, but during the mortgage crisis our growth certainly spiked. A year ago we did an acquisition that gave us substantial growth as a company that continues what this business was really built on, staying true to the core of what it is that we do.”
Now Jaffa is building off that momentum and looking toward the future.
Find new opportunities
While Safeguard was anything but lacking growth, Jaffa knew there were chances to grow the company in new ways. In 2012, Bank of America offered Safeguard that chance.
“Bank of America, through its Countrywide Financial Corp. acquisition in 2008, acquired a field service company that conducted similar processes to what we do, but strictly for Bank of America,” Jaffa says. “BOA has been divesting itself of many of those acquired affiliates, and we purchased their field service company, Bank of America Field Services, in September 2012.”
Bank of America needed to ensure that it was partnering with the right buyer, since the deal would be a long-term relationship.
“BOA viewed us, as others do, as the industry leader,” he says. “When it came to protecting and preserving their assets, they wanted a partner, and hence sold their field service company to the industry leader.”
From a volume perspective, gaining Bank of America as a client has almost doubled the size of Safeguard.
“The acquisition created a buzz and energy in this company that was different than what our typical growth has created before,” Jaffa says. “Now that we’ve done this acquisition, and it has doubled our business, we can’t lose focus of Safeguard Properties and what it is that we do here.”
The Bank of America acquisition was the first that Safeguard has done. The company has built its growth through customer service, relationships and organic growth.
“Our growth has been through the reputation that we have built for ourselves and gaining additional clients,” he says. “That is how we have continued to see growth. Of course, we have expanded our services. Twenty-four years ago, the services may have been a lot smaller in scope of what we do today for our clients, but we are still very focused on the property and preserving and taking care of that property.”
Like anything else, the needs of Safeguard’s clients and of this country when it comes to housing have grown. The company continues to support those needs while determining what it needs to do next.
“It comes down to surrounding yourself with the right people, and people who are smarter than you are,” Jaffa says. “This company would not have had the growth that it has had without having the right people in place.”
Jaffa says another key is staying true to your core values. Despite how much Safeguard has grown, Jaffa isn’t straying from those values.
“We’ve become a large company,” he says. “Walking in here every morning and leaving at night, I never let it get to my head that we’ve become so large. I know I am the same person walking in here every morning, and I’m the same type of person walking out as I was 19 years ago. Sometimes you see too many executives who let that get to their head, and you can’t let that happen.”
Despite Safeguard’s ability to grow each year and work its way to the top of its industry, the company has still faced challenges. With so many of its employees out in the field, technology has been one of its biggest.
“Technology for us has been phenomenal,” Jaffa says. “However, every six months technology becomes outdated, and keeping up is a challenge. As a company we have been extremely aggressive in our budgeting and spending to be in front of technology, because it is a huge driver for us in order to continue on the path we are on.”
Technology can be your biggest friend or your biggest challenge. It’s all on how you attack it.
“We can’t get our job done unless the people in the field get the work done,” he says. “The days of paper are long gone. We are in an environment today where we expect responses from people at properties in the field. The mobile technology is tremendous in our space. Real-time data from the properties is what we’re working on, and some of that is in place today.”
Safeguard’s mobile technology enables the company to get quicker responses from the field, quicker responses to its clients and quicker reactions from investors, which ultimately protects and preserves a property.
“It’s a win-win for everybody,” Jaffa says. “The old days of you telling me a condition and it bouncing around to different people could have been a 14-day process. We’re in an environment where neighbors, cities and our clients want real-time resolution, and the only way you’re able to do that is if we’re able to communicate from the field.”
Staying on top
While Safeguard has done the things to make it No. 1, its position in the industry means others are biting at its heels trying to dethrone the company.
“Every industry has competition,” Jaffa says. “You stay No. 1 by staying true to what you set yourself out for. We didn’t become No. 1 because of our looks. We became No. 1 because of our creative thought process, being in front of issues before they became issues and giving our clients the level of service that they required.
“Competition is healthy. It keeps everyone on their toes. We’re in an environment where everybody wants options and we’re going to keep doing what we’re doing and our competitors are going to keep doing what they’re doing. As long as we stay true to what we started this company out as we’ll be fine.”
One of the differentiators is how Safeguard has partnered with and built relationships with local communities where the company works.
“Our competition continues to try to follow that model, but it’s more reactive from their standpoint rather than proactive from our standpoint,” he says. “Some of the largest cities in this country know us and know they can pick up the phone when there is an issue at a property and that we’ll take care of it immediately.
“People think it’s just foreclosures, but we’re really protecting neighborhoods against vacant blight, against unsecured, unsafe properties around this country. If we weren’t around, the country would be in a lot worse shape than it is with the horrible housing crisis that we’ve had.”
According to Safeguard, tens of thousands of dollars in home value, up to 30 percent of the value of the home, can be negatively impacted by a vacant property on the street. When those properties have problems, it can negatively impact the tax valuations and become a bigger burden on the municipalities.
“When these homes are protected, it upholds the value because it doesn’t negatively impact the surrounding properties and cities aren’t sending someone to cut the grass or deal with the code enforcement violation,” Jaffa says. “It lessens the financial burden on municipalities’ budgets.”
As the housing crisis continues to fix itself, Jaffa and his team at Safeguard are once again looking for the next growth opportunity.
“One of the things that we are very aggressively contemplating is doing additional acquisitions,” he says. “Between our people, systems and our network there are a significant amount of opportunities for us to take advantage of and diversify.” ●
How to reach: Safeguard Properties, (800) 852-8306 or www.safeguardproperties.com
Take advantage of opportunities outside of organic growth.
Tackle challenges head on and always be looking at what’s next.
Build your business by staying true to the values it was founded on.
The Jaffa File
Name: Alan Jaffa
Company: Safeguard Properties
Born: Brooklyn, N.Y.
Education: He took college courses but did not earn a degree.
What was your first job and what did you learn from it?
I ran a freight elevator at a Wall Street building that my uncle managed. As a 16-year-old kid, I had the fortune to interact with a lot of business people. What struck me was that some of the most powerful people were also the most humble. They took the time to talk and show respect to everyone, regardless of their role or status. That’s always stuck with me.
What is the best business advice you have received?
Surround yourself with the best people and trust them to do their jobs. Nobody knows everything, and the more you can rely on smart and talented people, the more successful you’ll be.
What do you see as the most important thing Safeguard does for a property?
What happens to one property happens to the neighborhood and community in which it exists. When we protect the value and condition of one home, we protect the value and quality of the neighborhood.
If you weren’t a CEO, what is something you have always wanted to do?
What I enjoy is talking to budding entrepreneurs who are looking for guidance to start or grow their companies. We have a lot of talented people in this community with good business ideas. It’s gratifying to offer some perspective, and I find I learn a lot too.
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Over the course of the 120-plus years that Irwin Car and Equipment has been in operation, the company has undergone several ownership and identity changes — but it wasn’t until William Baker took over the company in 1993 that Irwin Car and Equipment started to reach its full potential.
Founded in 1891, Irwin Car started as a manufacturer of cast iron wheels and mine cars. The company evolved into making steel mine cars, but by 1981 and 1982 the industry was changing. Miners were moving away from mine cars and using belts and conveyors. Irwin at that point got left behind.
The company’s president at the time approached Baker about his interest in buying the company. Baker wanted to do a lot more than the current president had wanted or was willing to do. He had been happy running the company with six or seven people and doing less than $1 million a year in business.
“I had known that company for a long time because I was a supplier to it, and I thought it was a niche business that had a lot of potential to grow,” says Baker, who is now the company’s president and CEO. “My goal was to buy the business and take it from six people and grow it to $20 million.”
The few people in the business at the time thought Baker was unwise, but he embarked on a program to build up the company anyway.
“Twenty years later here we are at $50 million in sales with seven business units,” Baker says. “We don’t do anything today that they did back then.”
Here’s how Baker helped Irwin Car and Equipment realize its true potential.
Get with the times
When Baker bought Irwin in 1993 the company was still doing business in industries that were either not growing or dying. Today, the company has grown from six employees to 125.
“We’ve grown dramatically, and we’ve introduced a whole host of new products,” Baker says.
“My background has been in growing and building businesses, and this one isn’t the first that I built.”
Out of college, Baker went to work for Midland Ross, a global diversified manufacturer with $1.2 billion in sales in the 1970s. He was put on a fast track and given experience in a number of different areas of the business.
“I learned how to do things first class with a lot of money, and then first class with no money and a lot of risk,” he says. “Having worked for a big corporation you learn how to do things the right way. I was able to sort the wheat from the chaff and evaluate what I needed to do and what I didn’t need to do and what made sense and didn’t make sense.”
That’s why he wanted to get involved with Irwin and had the vision to take the company beyond what it was doing.
“We have replaced all the equipment and we’re a totally different company,” he says. “We’re a custom engineering and design manufacturer of material handling equipment. We have formed seven business units, and we principally have a lot of niche markets.
“We have a business unit that makes wheels and wheel assemblies for all types of applications. We make wheels from 4 to 65 inches in diameter. We make wheels for the NASA launch pad, the Hubble Telescope Observatory, the Seattle Mariners baseball dome and the Arizona Cardinals turf field that they roll in and out.”
The company has two other business units, one that makes industrial transfer cars with an 800-ton capacity and the another that makes steerable trailers, automatic-guided vehicles and big transporters up to 400-ton capacity.
Irwin still has a business unit that makes specialty cars for the mining industry and tunneling, and one that makes locomotives and mantrips for tunneling and mining. The company also makes the signaling and switch equipment for all the streetcars and light rail systems in North America.
“The company was not in a niche market when I bought it,” Baker says. “It had a wheel business when I bought it, but they only made wheels that were 12, 14 and 16 inches in diameter. My thought was if you could do that you could make bigger wheels, smaller wheels and other circular products.
“It was a situation where we said, ‘If we can make the wheels, we can sell the bearings and mount motors and drives and represent a company that sells roller chain and conveyor chain and sprockets. That led us to moving into industrial cars and beefing up our engineering department. It was a complete building process.”
Focus on growth
Over the past 20 years Baker has managed to grow the company from a
$1 million business into a $50 million one. But he still sees further potential and has his sights set on hitting $100 million.
“That’s not a magic number or anything, but I believe we could get there,” Baker says. “We’re still looking to grow strategically and synergistically. We’re also looking at new product development.
“My philosophy has been that companies don’t just stay the same. If you don’t grow, you actually regress because the market is ever changing, the customer base is ever changing and nothing stays the same.”
Irwin operates in a very tough market, but Baker says this will be the company’s best year ever, not because the economy is good, but because it sells to 22 markets in nine foreign countries and 42 states.
“We’ve been able to increase penetration with our existing customers and increasing penetration with new customers while adding new products,” he says. “We think we can continue to grow. We’re biting off market share from competitors, and there has been a lot of rationalization in the industries we serve, and the strong will survive.”
Baker’s keys to growth success start with him. He views his role in the company as needing to be out in the marketplace so he knows what is happening firsthand.
“I’m out there with our salespeople getting to know our customers and our markets, and based upon that, I have a good feel for what’s happening in the marketplace,” he says. “No. 2 is to have good people to rely on and trust who can assess what’s happening in the marketplace.
“No. 3 is to have a vision of where each market is going and what products may be up and coming and also looking at competitor’s products to see how you could enhance them by working with your customers.”
His other key to growth has been his willingness to take some calculated risks.
“We spent $3.8 million in our manufacturing facilities in the last three or four years when the economy was tanking,” Baker says. “We believed this was the time to do it because the markets would come back some day.”
While those markets are indeed bouncing back, they still aren’t as great as Baker had hoped they would be at this time.
“We basically haven’t seen growth for the last six years and that’s been the biggest challenge,” he says. “We sell to companies like Boeing and Caterpillar, and people aren’t spending any money because they don’t have any confidence. It’s gotten to the point where people have cannibalized and cannibalized to the point where they can’t do it anymore and they have to buy some equipment in terms of modernization, expansion and job creation.”
Looking for a catalyst to get the economy moving again, Baker put his focus on new markets and products for the company.
“We’ve continued to develop new markets and new products,” he says. “One product in particular was a low-emission diesel mantrip and locomotive for the mining and tunneling market. We received a very significant order that has carried us the last 2½ years. It was a great new risk for us and a great new product line.”
That was a high-risk, high-reward proposal for the company, because it was historically making battery and trolley electric locomotives. The jump into diesel was a big stretch.
“You have to look to the future of where that market is going or what kind of products you can produce and what kind of markets you can enter that appear to be high growth and sustainable for the long term,” Baker says.
“I drive my business from a sales and marketing standpoint. From our perspective the customer is No. 1, because if you don’t have a customer you don’t have a business. We’re very customer-oriented, and we’ve continued to work with our customers to develop new products and look for areas where they have needs.”
How to reach: Irwin Car and Equipment, (724) 864-8900 or www.irwincar.com
Make sure you see the full potential of your business.
Focus on growing new markets and products.
Continue to listen to what your markets and customers are looking for.
The Baker File
Name: William Baker
Title: President and CEO
Company: Irwin Car and Equipment
Education: He received a degree in management and economics from Westminster College. He also earned a master’s degree in business administration from the University of Toledo.
What was your first job and what did you learn from it?
When I was about 12 years old I had a grass cutting business. I also worked for White Swan Amusement Parks for two summers when I was 14. Those jobs taught me to work hard, be focused and that at times I had to make sacrifices. When my friends were out having a good time, I had to work.
What was the best business advice you ever received?
You have to treat people like you want to be treated.
In all your experience growing and building businesses, what has been one of the biggest keys to success? The ability to stay focused and be determined are the two critical ingredients.
If you could speak with anyone from the past or present, with whom would you want to speak with?
I always admired Vince Lombardi.
When people think about customer service, the first thing that may come to mind is dreading that call to their bank or their mobile provider. After a machine answers your phone call, you have to wade through endless prompts and messages that don’t apply to your problem before you eventually end up speaking with a live human representative anyway.
PV Kannan is out to deliver solutions to those automated customer service issues. Kannan has an extensive background in customer service technology companies. He was on the ground floor of the revolutionary concept of offshoring and helped pioneer chat and email as customer service technologies.
In early 2000, Kannan co-founded 7, a customer service technology company to combine his first two experiences with the industry and improve upon those ideas.
“The goal in starting 7 is how do you make it truly enjoyable and how do you give an experience that’s outstanding,” says Kannan, CEO of 7. “The reason I started this company was to make 800 numbers easier for me to use. I wanted to figure out ways to make it an enjoyable experience.”
Today, the 10,000-employee 7 tallies more than $200 million in annual revenue. Many of the challenges 7 faces involve the market and how to get the message across as to what the business does in a way where adoption by large enterprises is easier.
“Even though our business is designed for consumers to get more joy out of customer service, ultimately the ones cutting the check to us are large enterprises,” Kannan says. “For us, the market challenge is getting the message across on why customer service needs to be rethought.”
Here’s how Kannan and 7 are rethinking the customer service experience.
Create an innovative culture
In the last couple of years, 7 has been looking at customer service technology and finding ways to make changes “bite size” so an enterprise can take a bite without trying to change the world.
“No matter the size of the company, change is a tough thing to do,” Kannan says. “How do we make it easy enough for them to try something different and then slowly expand on that? That’s what we have worked on — making it easy to adopt and not so inclusive into their systems so it’s not viewed as a big change program.”
Kannan is cautious that his company isn’t just innovating for innovation sake. The business is very driven by making sure enterprises get what they want.
“There’s no point in having an innovation that is cool and awesome, but serves no purpose,” he says. “Companies want to improve customer experience, but cost is a big deal for enterprises. It costs a lot of money to service customers. If you’re one of the top five banks, you’re spending somewhere between $300 million and $600 million in terms of people and technology to serve customers.”
The way 7 approaches it is to look at the cost equation. It has to be simple to adopt and save money. It cannot require a big upfront capital investment or people investment, because that typically reduces the chance for adoption in a large enterprise.
“Those are the design criteria on our mind,” he says. “Whatever innovation comes up has to meet that criteria. The underlying mission is it should make it easy for consumers to do business with companies.”
The key to 7’s innovation success over the years has been the creation of a culture that fosters innovation.
“A CEO cannot delegate innovation to some department,” Kannan says. “It has to be a cultural absorption of the idea that innovation is something you do. If that’s done, it catches on like fire.”
That culture starts with questioning your own strategy in creative ways.
“People know that I’m the kind of guy that even if I signed off on a decision, I’m willing to relook at it in an interesting way if there is substance behind it,” he says. “Once you create that kind of culture, it makes it easier for people to challenge.”
As the company grows bigger, one of the challenges for people who are new to the system is trying to get a feel for the place. They have to figure out how things get done, who makes the decisions and what the criteria is behind it.
“If it’s established based on transparency, fairness and a willingness to look at things in a fresh way, it becomes easier for people to come in and contribute,” he says. “That’s what we try to foster.”
In the last year, Kannan and his team at 7 have invested deeply in design to rethink customer experience from a design standpoint. The company hired a senior designer who had a design background with Apple Inc. and Yahoo Inc.
“That’s something very new, and it’s unconventional for a technology company to take that perspective,” Kannan says. “If you look at companies in our space, technology companies that improve customer service, you don’t have that perspective at all. It’s all about how great is the technology. What is so cool about it? How does it disappear in the background for consumers to interact with it?”
Kannan wants to change the way customer service technology interacts with its user.
“You’re pretty used to dialing an 800 number and hearing two or three messages that we all hear and are sick to death of hearing,” he says. “One is about English and Spanish — press one if you speak English, press two if you speak Spanish. The other is how much we care about you and we’re going to put you on hold. The third is that this conversation is going to be recorded for quality purposes.”
What 7 is striving to do is connect that phone call to an Internet-connected device, if and when applicable.
“Suddenly an 800 number experience comes alive with video, pictures and text, and you’re able to do that transaction easier than if you had to download an app,” he says. “You’re still on the phone, so you’re actually speaking.
“The rethinking and design comes in for things like how do you effectively use speech? When do you give instructions? When do you stand back and let the customer do what they need to do? How many degrees of freedom do you give customers so they can do it on their own terms?”
Most often people are used to service in a straight, single-channel mode, so either you’re dealing with an automated system, or you’re passed to a human being.
“What we’re saying is could you enhance that experience using a device?” Kannan says. “Could we mix speech versus text on a screen? Where does video play a role? How do you get moving to your end objective sooner rather than later? Those are the open-ended questions we’re asking.”
7 has been creating solutions for airlines, banks and credit card companies where the company has brought a different design element to the customer service table.
“One of the things we do is we recognize you based on your mobile number, greet you by name and actually tell you what you’re probably looking for,” he says.
If you’re calling an airline and it’s the day of your travel, data shows that there are only two reasons travelers call within six hours of a flight — either you’re cancelling your flight or you want to change the flight.
“So we would say, ‘Hey Greg, looks like you’re travelling today from Cincinnati to destination X, and is this what you’re trying to do,’” Kannan says. “Think about the difference in greeting you that way as opposed to saying, ‘Thanks for calling X airline, press one for English.’”
Similarly, 7 redesigned how credit card company’s customer service technology interacts with users. Take the example of having your card put on hold for suspicious charges.
“What 7 did is we can tell if you’re calling from a smartphone and the credit card company can send the charges by text and the customer service person will stay on the line while you check the charges and help you,” he says.
“Instead of an automated system painfully relaying line-by-line the last six charges you did, you get to see it in one shot and you can say, ‘Yes, those charges are mine, or no, this one for $50 isn’t me.’”
Kannan and his team rolled that out last year and the adoption rate is very high. The company also asks customers at the end of the call to answer a simple five-star rating survey about the experience via text.
“About 80 percent of people fill it out,” he says. “More than 95 percent give it a five-star rating. That’s a practical example of how you would use a smartphone and use the ability to display data or screen information while you’re on a phone call without downloading an app.”
No matter how you get there, at the end of the day you want the resolution on what that user set out to do.
“We measure how many people succeed in doing it themselves,” Kannan says. “If 20 percent succeeded in automation and 80 percent had to talk to a real human being to get a result, that system is not doing its job.
“That’s what we look at — what’s the current success rate, how much time does it take, how many people really like that experience? Then you measure your solution design and whether it’s going to improve it. Sometimes you have to just try it out.”
How to reach: 7, (650) 385-2247 or www.247-inc.com
Create a culture that fosters innovation.
Rethink the standard ways of delivering an experience to consumers.
Measure whether your solution is solving the problem.
Name: PV Kannan
Title: co-founder and CEO
Born: Chennai, India
Education: He has degrees in finance and accounting from the Institute of Cost and Works Accountants of India, and the Institute of Chartered Accountants of India.
What was your first job and what did you learn from it? I did bookkeeping for my dad when I was 11. The takeaway from that job was you don’t get free money.
Who do you admire in business? A lot of my inspiration came from my dad and watching him build a business.
What annoys you most about dialing an 800 number? The thing that annoys me most is the fact that you still have to say “one” for English when you never even selected two — why even ask that? Out of 100 things that annoy me, that’s probably the easiest to solve.
What is a customer service solution that you’re most proud of at 7? I would say it’s the work we are doing for banks uniting their Web, interactive voice response and mobile services.
It’s hard to imagine a business world today without a diverse and inclusive workplace. It wasn’t that long ago, however, that women weren’t in leadership positions and offices didn’t have ethnically diverse workforces. At EY, within its St. Louis office in particular, that diversity and inclusion effort has been in big part thanks to Ruth Saphian.
Saphian became EY’s St. Louis office managing partner in April, a promotion that made her the first female managing partner of the 320-employee firm. Her new role coincided with EY St. Louis’ 100th anniversary, EY’s corporate leadership changes and the company’s new brand and tagline, “Building a Better Working World.”
“I’m very proud to be the first female managing partner in St. Louis,” Saphian says. “I have had a lot of support from both women and men and from the firm in getting me to this point. It is real progress for St. Louis and for the firm, and it’s been pretty representative of the progress we as a firm have made around our diversity and inclusion initiatives over the last 20 years.”
While EY has made leaps and bounds in its efforts surrounding diversity and inclusion, the nature of EY’s business leaves the firm with plenty more to do. Saphian now has to lead a multi-generational workforce, focus on furthering its diversity efforts and continue to win the war for talented professionals.
“All professional service firms right now, EY included, are going through quite a few challenges,” Saphian says. “We have to figure out how we can all leverage each other’s successes and differences to drive a better product.”
Here’s how Saphian is leading the diversity and inclusion charge at EY St. Louis.
Focus on diversity
When Saphian started her career at EY in 1993, she was in a class of roughly 40 individuals, half men and half women. It wasn’t long thereafter that she noticed women around her leaving the firm much quicker than men.
“The firm did a lot of research at that time and narrowed it down to a couple of reasons or themes,” Saphian says. “There was a lack of mentoring relationships. Women had limited access to formal networks and informal networks. Women, and men, were having trouble balancing work and personal life.”
At that time the firm was developing a lot of initiatives and focusing on programs on coaching and mentoring. EY developed programs around flexibility and flexible work arrangements called FWAs.
“It’s a customizable program that depends on what you have going on personally as well as your client load,” she says. “You can work out an arrangement to work 80 percent, 70 percent or 50 percent of a full-time load.”
Saphian herself took advantage of that program and worked about 70 percent. While the firm had these programs available in the early ’90s, there were still some challenges to the programs because people weren’t taking advantage of them.
“People thought if you took advantage of these, you were slowing down your career path,” she says. “I went on FWA shortly after I had my first child, and I noticed that I didn’t advance slower. I was promoted to partner the same year as all my peers, completely on track.
“I was very transparent that I was on a flexible work arrangement. I talked about it with my clients, my peers and my leaders. I found that everyone was very supportive of it, and I think it was critical that I was transparent about the fact that I was on a reduced workload, but committed about advancing my career.”
While the program worked for Saphian, it wasn’t well enough known and the firm still had work to do to put it in a bigger spotlight.
“When I got promoted to partner, I launched our D&I program here in St. Louis and took a leadership role in promoting the positive experiences that I had,” she says. “I started a steering committee that is comprised of partners across all of our service lines.”
The steering committee is designed to set the tone at the top to develop the strategic direction around diversity.
“We structure that by developing working committees around various D&I initiatives such as professional women, ethnicity, LGBT and health and wellness,” Saphian says. “There is also an executive sponsor on each committee. This is not an HR responsibility. I view diversity and inclusion as an executive responsibility.”
The committees develop programs, events and activities that provide access to role models and mentors, build formal and informal networks, and help balance work and personal life.
“You have to focus on your day-to-day actions,” she says. “As a leadership team, are you making decisions that are inclusive of different cultures, styles, genders and races? Are you building the best teams based on diversity? Are you getting the best people and are you trying to move forward a cultural shift?”
On a national basis last year, 30 percent of EY’s partners, principals and executive directors were female. In the past five years in St. Louis, that percentage is 45 percent.
“We’ve made a lot of progress on the female side, but we have more progress to make around ethnic diversity and incorporating more diversity into our culture,” she says.
Expand your workforce
As the firm continues to ramp up its focus on diversity and inclusion, a challenge for EY continues to be its resources and what the firm calls “winning the war for talent.”
“Our greatest asset is our people,” Saphian says. “We’re a service firm, so finding the right people with the right skills can be a challenge, and it can be quite competitive. We’re always looking for the newest and the brightest people to hire and retain.”
Finding those top candidates and retaining that talent means EY works with a multi-generational workforce, and that has its own set of challenges.
“A lot of handling a multi-generational workforce has to do with communication,” she says. “I know it sounds basic and simple, but it really does boil down to that. We’ve held a lot of intergenerational conferences and training, and frankly, we just talk to each other.”
EY holds a number of panel discussions spanning the generations from people just getting out of college all the way up to people who have been at EY for 30 years.
“It’s really about understanding very different work styles and how you adapt those styles to one another,” she says. “The younger workforce is much more heavily focused on technology and communicates through technology more than the older workforce, so it takes training and discussion on how to bridge those gaps.
“From a numbers standpoint we have more young individuals, but from a leadership standpoint it skews toward the older. So it’s important for our leadership to understand the younger generations and how they operate and their needs because they will be the leaders 20 years from now.”
No matter what the differences are among your workforce, whether it’s a generation gap or ethnic diversity, you have to be thinking about embedding workforce diversity and inclusion in your everyday work processes.
“When it comes to diversity and inclusion, 20 years ago when we started this journey, we spent a lot of time talking about what is the business case for it,” Saphian says. “The business case was we were moving into a global environment. More companies are becoming global and we need to adapt to that and change.”
Research shows diverse teams make the best teams, bring the best ideas and bring the best solutions.
“I think everyone gets that now,” she says. “But now it’s about how do you change a long-standing culture? How do you embed that in your daily work processes so that people are changing?”
At EY St. Louis, the firm has trained and studied a concept called unconscious bias. That means people may be unintentionally making assumptions or decisions based on some biases that they aren’t aware they have.
“You have to understand on a day-to-day basis what some of the decisions you may be making based on biases are that you’re not really aware you have and are unintended,” she says.
Win the war for talent
In order for EY to build up a diverse workforce, the company has to go out and recruit the best talent available in a very competitive environment.
“Every year we recruit from the best schools around regionally and nationally,” Saphian says. “Frankly, it is a competition, and they’re looking at us, and we look back to our own culture.”
EY offers an 18-month international exchange program and has flexibility programs as employees go through different parts of their career, or stages in their life.
“You have to help them understand the excellent career advancement opportunities they’ll have, what will be the skill sets they will develop, as well as how they will fit into our culture while they are here,” she says.
Saphian hears over and over again that new employees want to go into a culture where they’re going to feel accepted, have a long career and feel like they can succeed based on their own personal style.
“We really try to offer up a lot of different options so they can see themselves succeeding here long term,” she says. “It’s about offering options for them so they feel they can develop their career both professionally and personally.” ●
How to reach: EY St. Louis, (314) 290-1000 or www.ey.com
Focus on becoming a more diverse workplace.
Make sure you embed diversity and inclusion in your organization.
Work to understand everyone’s differences and how to accommodate them.
The Saphian File
Name: Ruth Saphian
Title: Managing partner
Company: EY St. Louis
Born: Wentzville, Mo.
Education: Attended Southeast Missouri State and received a degree in business administration.
What was your first job and what did you learn it?
I was a carhop at A&W. It taught me hard work and good people skills. Those skills will take you far in your career.
What was the best business advice you ever received?
The best business advice given to me was to develop relationships with the people above you. Develop mentoring and sponsoring relationships.
If you could speak with anyone from the present or past, with whom would you want to speak with?
Abraham Lincoln. He came from a very humble background, yet he achieved great things by going against the grain.
What do you enjoy doing in the St. Louis area?
St. Louis has a very rich arts culture, and I enjoy taking advantage of the arts and culture that the city has available.
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On his first day working at the United Way of Greater Cleveland Bill Kitson sat down for a 6 a.m. interview on WKYC-TV.
“It was a great opportunity to say hello to the community first thing in the morning on my first day,” Kitson says.
A 25-year United Way veteran, Kitson became the Cleveland chapter’s new president and CEO in June 2012. The Cleveland community was curious to hear how he planned to better the organization and its efforts in the community.
“Cleveland is my seventh United Way community,” Kitson says. “I’m really thrilled with the level of support of the United Way here, and the level of corporate support is just spectacular. It gives us a great base to build from as we try to create change in the community.”
The United Way of Greater Cleveland celebrated its 100th anniversary in 2013 and Kitson has been focused on changing the United Way from fundraiser to community impact worker.
Here’s how Kitson is working to improve the United Way of Greater Cleveland and its community.
Understand the issues
When you’re a new president or CEO, everyone has questions for you and they want to know what you’re thinking. You have to resist the urge to talk about that, and instead ask and listen to the people you’re with.
“There will be plenty of time to share your story and your point of view about the work that’s going on, but if we don’t stop and listen first we may miss opportunities to learn and grow even more,” Kitson says.
Kitson heard that the community wanted more focus around graduating kids, keeping families financially stable and keeping the community healthy.
“As I started hearing the aspirations of folks that swirled around those issues, those are the things our volunteers are looking at to see what our priorities should be in those areas,” he says.
One of the biggest shifts in Cleveland’s United Way has been focused around changing from fundraiser to community impact worker.
“We’re trying to engage our community in new and varied ways,” Kitson says. “So not only asking for your money, but for your time and asking you to volunteer in schools and in neighborhoods. We are also asking people for their voice and asking them to advocate and stand up for some of these issues as our community faces them.”
The engagement strategy is an important aspect for those organizations that are focused on a mission.
“You need to have a connection to your community beyond asking for a check,” he says.
This past year the United Way of Greater Cleveland has been strategizing and developing new plans that will ultimately make a difference in the community.
“When I talk about listening and understanding our community — that’s not just a two- or three-year thing, that’s a generational thing,” he says. “We have to get better about listening and understanding and knowing where we can impact our community best.
“When people think of nonprofits that they’re really passionate about, their involvement with them goes beyond fundraising, and we have a similar mission to create change in the community. There are a lot of folks out there who would get really excited about a richer relationship with their United Way and we look forward to that.” ●
How to reach: United Way of Greater Cleveland, (216) 436-2100 or www.unitedwaycleveland.org
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Alex Algard wasn’t your typical college student. Rather than lounging around his Stanford dorm room, staying up late and sleeping in, he was using his room to accomplish his vision of helping people find, be found and connect.
In 1997, from that Stanford dorm room, Algard founded WhitePages Inc. Since then, the privately-held, Seattle-based, 100-employee company has become the leading provider of contact information in North America, with a top 40 Web property, 10 top-ranking mobile apps and more than 50 million monthly users.
“Whitepages.com is our flagship website,” says Algard, founder and CEO. “It’s primarily oriented toward consumers. It’s a free, supported service, so our company drives revenue from online advertising. We allow users to find contact information about people and businesses.”
At its core, WhitePages is a data company. Over time it has amassed a significant database of contact information about U.S. individuals and businesses, adjusting more than 1 billion records every month.
“Over time, users have recognized that we provide a fairly unique set of information, and consequently traffic and usage of our website has been on a steady and continuous growth trajectory over the past many years,” Algard says.
Today, he is focused on continuing that growth through new opportunities in WhitePages’ core business, mobile apps and strategic acquisitions.
Stay ahead of the competition
In the space that WhitePages operates in, competition is extremely fierce. Algard is ensuring that WhitePages stays connected to its customers first and foremost.
“My focus is to make sure we offer great services and great user experience to our customers in whatever area that we put resources into, and that we really establish ourselves as the best service in the market in whatever things we may launch,” Algard says. “That’s where I spend a lot of my time.”
In order to do that, especially in the online market that is driven by people, Algard and WhitePages place a high premium on attracting the best possible employees.
“I spend a fair amount of my time making sure we both attract the best and also retain the employees that are with us,” he says.
As a data company, it comes down to offering the most complete database that the company can, the most comprehensive coverage and the best quality.
“That involves continuously seeking out more and better data sources,” he says. “We also have to do a better job building and organizing the data that we collect. Because we’re adjusting 1 billion contact records every month, to some extent our challenge isn’t just to source more data, but finding what to actually do with it.”
WhitePages assembled a team of data scientists that has really elevated the company’s performance in the last year in building a well-structured database.
“There is a lot of rocket science that goes into organizing a database of our size cleanly,” Algard says. “Those are the core things that I spend time on to make sure that we’re staying ahead of everyone else. The next focus after that is making sure all the data flows smoothly to all the people who are customers of our data, whether they’re external customers or internal users.”
One of the biggest challenges for the company recently has been building WhitePages Pro, a B2B service.
“It turns out that a very significant portion of our overall audience is actually business users who come to our website to do all sorts of things from identity verification to fraud screening,” he says. “The reason we got excited about this new segment was that we felt we could offer a whole lot more value to enterprise users if we actually built the service targeted at them.”
Algard has been dealing with how to build awareness of this service to people who already think they’re getting the best of WhitePages.
“It’s gratifying that once people actually do give our new WhitePages Pro service a try, many of them do convert into paying enterprise customers,” he says. “But it’s always a tough sell when what someone is already using is costing them zero.”
All that WhitePages can do is continue to create better services and hope that it keeps in front of competition.
“One of the best ways to stay ahead of the competition is to not actually obsess about what they are doing and focus on how you can delight your users,” Algard says. “In some cases, what the competition is doing is a lying indicator. If all we did was try to match what they’re doing, well, they’re probably working on something new that hasn’t been released yet.
“The best thing we can do is be super customer-focused and try to put ourselves in our customer’s shoes, and ask ourselves, ‘What can we do to delight them?’”
Although WhitePages has a huge volume of users, those users are fairly anonymous given the company’s online business and the fact that users don’t physically walk into a WhitePages store.
“It takes a little bit more effort to actually mine data and try to understand how people are really using our website based on analytics, surveys and focus groups,” he says. “What it comes down to is being really sensitive to how we can build the best user experience.
“Frankly, sometimes it means not listening to our customers. If we just asked them what we can do to build a better service, they themselves sometimes don’t know how to articulate that. Careful listening sometimes means trying to figure out what it is that customers really want even if they aren’t articulating it, and that takes a level of vision.”
Find new opportunities
Algard never sits still waiting for an opportunity to come to him. He is always out looking for opportunities that can add value to WhitePages. Several years ago, the company built WhitePages Current Caller ID, a caller ID and text identification mobile app service that has proved to offer plenty of value.
“When your phone rings or you get an incoming text message, our app will pop up an alert message that identifies that number even if you don’t have that number in your phone’s address book,” Algard says. “Our app will identify the name and the location of the calling or texting person.”
In addition, WhitePages allows its users to link the app to their social networks.
“If the person you’re communicating with is connected with you on one of those social networks, then when the phone rings you will see their latest tweet, or their LinkedIn job title and employer name, or their Facebook picture or latest status,” he says.
“In those cases you get a very rich set of information about the person who is calling you. By the time you pick up the phone, you have a bunch of contextual information.”
WhitePages learned over time that one of the uses of this service was to identify telemarketers or scam callers and texters.
“We started tinkering around with offering a call-walking or text-walking feature so that if those people call you, based on our automated algorithms, we’d have a way to identify scammers,” he says. “In those cases, the call or text message would go into a black box and the user wouldn’t be bothered at all.”
As the company was looking into this, it identified another app in the market called Mr. Number. It turned out that Mr. Number was truly the market leader in that particular niche.
“We figured that our Current Caller ID product would be that much better with an integrated spam blocking and vice versa,” Algard says.
WhitePages bought the Mr. Number app in May 2013.
“It’s two of the best mobile app solutions that we’re now combining together into what we think is going to be a great offer for consumers to really put their phone on steroids,” he says.
Of the opportunities in the pipeline for WhitePages, Algard is most excited for what lies ahead in the mobile space.
“We’re still in the first inning of mobile development,” he says. “Only about half of the U.S. market has cell phones at this point, so there is going to be a lot of growth in mobile with increasing adoption. On top of that, I think the pace of innovation in mobile is moving faster than in any other growth phase of the Internet in general.”
Since smartphones are packed with so many interesting apps from GPS to cameras, Algard expects decades worth of people discovering new businesses and services that can be launched off of mobile.
“We’ve treated mobile as a strategic top priority over the past many years and that’s why,” Algard says. “We’ve been fortunate to build our own mobile offering into a very important business today.” ●
How to reach: White Pages Inc., (206) 973-5100 or www.whitepages.com
If you had a crystal ball in 2008 and were looking to work for a company that deals in the home improvement industry, you might have been advised to run for the hills. But Ben Davis had no crystal ball when he became president of N-Hance Wood Renewal, a franchise that renews kitchen cabinets and floors — and regardless of the challenges, found ways to grow the company.
“I took the president position with N-Hance in 2008, which was not the best time to take over a home improvement business,” Davis says. “However, when the recession hit, it’s not as if people stopped caring about their homes.”
In fact, in many cases homeowners cared more about their homes because they understood they may be in that home longer than they anticipated. With the recession taking hold in late 2008 homeowners began looking for ways to maintain their current properties and started demanding high ROI decor and remodeling project options.
“We’ve positioned ourselves to fit very well into that space,” Davis says. “We positioned ourselves not to be victims of the recession, but to be opportunistic about changing consumer demands with regard to home improvement projects.”
Instead of the traditional sand and refinish process, N-Hance Wood Renewal’s services renew the existing finish of cabinets or floors, adding additional layers of protective finish and changing the color if the customer wants to get a factory look without all the dust, dirt and inconvenience of having to be out of the home for a few days. And the process saves consumers considerable money.
In an industry where nearly half of mom-and-pop and smaller remodeling companies have evaporated over the last five years, N-Hance Wood Renewal has grown substantially in that same period.
Here’s how Davis grew N-Hance since 2008 and is positioning the company for further growth in the next five years.
Don’t participate in the recession
N-Hance has been very fortunate to have a stellar network of franchisees who took on a mantra of refusing to participate in the recession. Every year throughout the recessionary period, the company experienced growth.
“Any organization that was operating without a great deal of fiscal discipline at that time was in a pretty precarious situation,” Davis says. “We’ve always been a pretty disciplined organization. We’re always willing to spend where a growth opportunity presents itself, but we manage ourselves quite well.
“On the other hand, we knew we had some franchisees in the network that enjoyed the housing boom and didn’t have the rigor or fiscal responsibility within the organization.”
Davis wanted to make sure he positioned the brand and its service offering properly to maximize on changing consumer sentiment, but also that the company was taking all steps possible to give its network of franchise owners every chance at surviving.
“It was really a two-pronged strategy of ‘Let’s go out and create opportunity, but at the same time let’s make sure the ship is as seaworthy as possible,’” he says. “It was really helping our franchise owners focus and understand, and our marketing partners focus on and understand changing consumer needs and consumer sentiments.”
A marketing partnership it has with Home Depot has helped N-Hance increase its sales. When Davis took over N-Hance, he met with several kitchen designers in Home Depot stores throughout the country and discussed how frustrating it was for customers to come in with mismanaged expectations as far as time and budget.
“Customers want to do a kitchen remodeling project, but when they see that just the new cabinets alone are going to be $15,000 or $20,000 and their budget is $12,000, they either laugh or cry their way out of the store,” Davis says. “N-Hance can make old cabinets look brand new, change the color and update the look of them for a third or a fifth of the cost of new cabinets.”
Davis positioned N-Hance with franchise owners and marketing partners with a specific message: This is the key to seek consumers who are extremely frustrated with not doing the project they feel they want to do — or in many cases, that they need to do in order to sell their homes.
“This is a new option that allows customers to get more out of their remodeling budget,” he says.
Follow the strategy
The biggest aspect of Davis’ strategy for N-Hance was making sure the franchisees were more profitable and able to perform as growth ramped up.
“We had to seek all the opportunities and be very growth-oriented,” Davis says. “We launched a lot of new tools around helping franchise owners hire the right people and track their labor expenses, material expanses and understand in a very detailed way the economics of every job that they did.”
N-Hance created several initiatives to make sure the franchise network was as secure, robust and healthy as possible. Making the timing of the company’s partnership with Home Depot fortuitous.
“As a lot of other lead sources or places that we would find customers were declining, that’s when we launched our Home Depot partnership and said we need to open doors to new lead sources and opportunities we haven’t gone after in the past,” Davis says. “Home Depot is a major part of that strategy.”
Statistics show that roughly 80 percent of the people who are looking to do a remodeling project to their kitchen walk into a Home Depot design center for the next step. Cabinets represent 75 percent of N-Hance’s total revenue.
“If you’re a new service offering like N-Hance, and you have an uneducated consumer base out there, and 80 percent of them are walking into Home Depot stores, that’s a great partnership,” Davis says. “Home Depot found a home for us in their kitchen design center. In fact, they coined a phrase around the whole idea which is ‘replace, reface, renew — a solution for every budget.’
“One thing we wanted earlier on that we weren’t doing nearly as well as we needed to be doing was getting referrals,” he says. “When our customers saw what we could achieve, we had this amazing moment of ‘Wow!’
“But we weren’t leveraging that unique moment of wow that we were creating in the customer’s home. We have been working with franchise owners on seizing referral opportunities and going after strategic alliances with stagers, real estate managers and property managers.”
Look to the future
Now that N-Hance has established its services and has built-up its partnerships, Davis’ focus is to grow the company’s footprint.
“We have 255 franchises throughout the United States and Canada,” Davis says. “We are looking for overseas expansion and in key markets throughout the United States and Canada. We have a lot of inventory available, so our big focus is building our network.”
One of the biggest ways Davis plans to build a more robust national footprint is to go after other opportunities that N-Hance hasn’t been able to go after like relationships with restoration companies, insurance companies and real estate companies on a national level. He also wants to grow the partnership with Home Depot.
“Today, we cover maybe 1,300 of their 2,000 stores and we want to be in all 2,000,” he says. “Our growth will also help us with the awareness issue among consumers considering a remodeling project. The more franchise owners we have out there that are helping to educate the public and advertising in their local areas, the easier that becomes.
“In my opinion we have a pretty sexy service offering that’s really fun to be a part of.” ●
How to reach: N-Hance Wood Renewal, (435) 755-0099 or www.nhance.com