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Sunday, 30 June 2013 20:00

Entrepreneurs change the world

Recognized as one of the world’s most prestigious business award programs, the Ernst & Young Entrepreneur Of The Year Awards celebrate gravity-defying innovators who build and run great companies. This June, we gather here and in 24 other cities across the U.S. to honor all of our regional finalists and welcome the award recipients from the class of 2013 into our Hall of Fame.

Entrepreneurs change the world and make it a better place to work and live. We honor them for their fortitude and resilience, and we celebrate their ability to forge new markets, navigate uncharted territory and fuel economic growth.

Congratulations to this year’s finalists and winners for their unyielding pursuit of business excellence. We are honored to share their inspiring stories with you.

Todd E. Novak

Midwest program director

 

Consumer Products and Services

Winner

Chris Clawson, Life Fitness

Finalists

Bob Keller, Escalade Inc.

Howard Stillman, Level 6 Corp.

Tom Mazzetta, The Mazzetta Co. LLC

Emerging Entrepreneur

Winner

Al Goldstein, Pangea Properties

Finalists

John Barnicle, Doug Lee, Richard Knight, Scott Kell, Jim Brewer and Tony Hiller – Peerless Network Inc.

Matt Matros, Protein Bar

Brian Spaly, Trunk Club

Family Business Award of Excellence

Winner

Jim Sartori and Jeff Schwager, Sartori Co.

Financial Services

Winner

Hugh McKean Jones IV, BankersAccuity

Finalists

Judson Bergman, Envestnet

Theodore L. Koenig, Monroe Capital LLC

Health Care

Winner

Dr. Stuart Bernsen, Chiro One Wellness Centers

Finalists

J.P. Fingado, API Healthcare

Michael S. Butler, Life Spine, Inc.

Jason Beans, Rising Medical Solutions

T. Scott Law, Zotec Partners

Industrial Distribution

Winner

Paul Jones, A.O. Smith Corporation

Finalists

Warren Young, Acme Industries Inc.

Todd Berger, Transportation Solutions Enterprises

Peter C. Anthony, UGN Inc.

Private Equity/Venture Capital Backed

Winner

Brandon Cruz and Clint Jones, GoHealth

Finalists

Daphne Preuss, Chromatin Inc.

Scott Harris, Revolution Dancewear

Zachary Boca and Daniel Ushman, SingleHop

Services

Winner

Michael Golden and Thaddeus Wong, @properties

Finalists

Bradley J. Dannegger, ARCO/Murray National Construction Company

Michael Romano, Associated

Heather Sanderson, Overture, LLC

Michael Miles, SeatonCorp

Technology

Winner

Andrew H. Sieja, kCura

Finalists

Daniel Adamany, AHEAD LLC

Chris Gladwin, Cleversafe, Inc.

Stopher Bartol, Legacy.com, Inc.

 

Judges

Cheryl Beebe

Douglas Grissom

Jay Radtke

Chris Dalton

Cynthia LaConte

James Reynolds, Jr.

Michael Gauthier

Laura Pearl

Jai Shekhawat

Published in Indianapolis
Sunday, 30 June 2013 20:00

Entrepreneurs change the world

Recognized as one of the world’s most prestigious business award programs, the Ernst & Young Entrepreneur Of The Year Awards celebrate gravity-defying innovators who build and run great companies. This June, we gather here and in 24 other cities across the U.S. to honor all of our regional finalists and welcome the award recipients from the class of 2013 into our Hall of Fame.

Entrepreneurs change the world and make it a better place to work and live. We honor them for their fortitude and resilience, and we celebrate their ability to forge new markets, navigate uncharted territory and fuel economic growth.

Congratulations to this year’s finalists and winners for their unyielding pursuit of business excellence. We are honored to share their inspiring stories with you.

Todd E. Novak

Midwest program director

 

Consumer Products and Services

Winner

Chris Clawson, Life Fitness

Finalists

Bob Keller, Escalade Inc.

Howard Stillman, Level 6 Corp.

Tom Mazzetta, The Mazzetta Co. LLC

Emerging Entrepreneur

Winner

Al Goldstein, Pangea Properties

Finalists

John Barnicle, Doug Lee, Richard Knight, Scott Kell, Jim Brewer and Tony Hiller – Peerless Network Inc.

Matt Matros, Protein Bar

Brian Spaly, Trunk Club

Family Business Award of Excellence

Winner

Jim Sartori and Jeff Schwager, Sartori Co.

Financial Services

Winner

Hugh McKean Jones IV, BankersAccuity

Finalists

Judson Bergman, Envestnet

Theodore L. Koenig, Monroe Capital LLC

Health Care

Winner

Dr. Stuart Bernsen, Chiro One Wellness Centers

Finalists

J.P. Fingado, API Healthcare

Michael S. Butler, Life Spine, Inc.

Jason Beans, Rising Medical Solutions

T. Scott Law, Zotec Partners

Industrial Distribution

Winner

Paul Jones, A.O. Smith Corporation

Finalists

Warren Young, Acme Industries Inc.

Todd Berger, Transportation Solutions Enterprises

Peter C. Anthony, UGN Inc.

Private Equity/Venture Capital Backed

Winner

Brandon Cruz and Clint Jones, GoHealth

Finalists

Daphne Preuss, Chromatin Inc.

Scott Harris, Revolution Dancewear

Zachary Boca and Daniel Ushman, SingleHop

Services

Winner

Michael Golden and Thaddeus Wong, @properties

Finalists

Bradley J. Dannegger, ARCO/Murray National Construction Company

Michael Romano, Associated

Heather Sanderson, Overture, LLC

Michael Miles, SeatonCorp

Technology

Winner

Andrew H. Sieja, kCura

Finalists

Daniel Adamany, AHEAD LLC

Chris Gladwin, Cleversafe, Inc.

Stopher Bartol, Legacy.com, Inc.

 

Judges

Cheryl Beebe

Douglas Grissom

Jay Radtke

Chris Dalton

Cynthia LaConte

James Reynolds, Jr.

Michael Gauthier

Laura Pearl

Jai Shekhawat

Published in Chicago
Sunday, 30 June 2013 20:00

Honoring the best of the best

NCA Ernst & Young Entrepreneur of the Year 2013

Since 1986, Ernst & Young has celebrated the entrepreneurial spirit of men and women who have followed and achieved their dreams, changing the lives of countless others by building their businesses and giving back to their communities.

Their passion, vision and persistence stand as a testament to their dedication. It was 27 years ago that Ernst & Young founded the Entrepreneur Of The Year program to recognize these dynamic leaders and to build an influential community of innovative entrepreneurs.

We have gathered here and in 25 other cities in the U.S. to welcome the men and women who are regional finalists into our community and to toast their vision. Their energy and self-confidence have turned their dreams into reality. We applaud them all for taking the road less traveled to launch new companies, open new markets and fuel job growth.

So let’s lift our glasses to celebrate their passion, innovation and unwavering commitment to win in the marketplace.

Ernie Cortes, program director, Ernst & Young Northern California

Here are the Northern California Ernst & Young Entrepreneur of the Year award recipients and finalists:

 

Advertising Technology

Award recipient – Tod Sacerdoti, founder and CEO, BrightRoll

Finalist – Aaron Bell, founder and CEO, AdRoll

Finalist – Bill Demas, president and CEO, Turn Inc.

 

Financial Services

Award recipient – Renaud Laplanche, founder and CEO, Lending Club

Finalist – Harpal Sandhu, president, founder and CEO, Integral Development Corp.

Finalist – Hayes Barnard, founder and CEO, Paramount Equity Mortgage

 

Life Sciences

Award recipient – Mark Fischer-Colbrie, president and CEO and Rich Ellson, Co-founder and CTO, Labcyte, Inc.

Finalist – Maky Zanganeh, D.D.S., COO, Pharmacyclics, Inc.

Finalist – Jeffrey Dunn, president and CEO, SI-BONE, Inc.

 

Platform Technology

Award recipient – Gurbaksh Chahal, founder and CEO, RadiumOne

Finalist – Chris Friedland, president and founder, Build.com

Finalist – Fabio Rosati, president and CEO, Elance

 

Retail and Consumer Products

Award recipient – Neil Grimmer, co-founder and CEO, Plum Organics

Finalist – Eric Ryan and Adam Lowry, co-founders, Method Products, Inc.

Finalist – Katie Rodan, M.D. and Kathy Fields, M.D., co-founders, Rodan + Fields Dermatologists

 

Services

Award recipient – Lyndon Rive, co-founder and CEO, SolarCity

Finalist – Mike Sechrist, CEO, and Elena Whorton, president, ProTransport-1

Finalist – Burton Goldfield, president and CEO, TriNet

 

Software

Award recipient – Aneel Bhusri, co-founder, co-CEO and chairman, and David Duffield, co-founder, co-CEO and chief customer advocate, Workday, Inc.

Finalist – Lewis Cirne, founder and CEO, New Relic

Finalist – Erik Swan, co-founder and CTO, Splunk

 

Technology Infrastructure

Award recipient – Ashar Aziz, founder, FireEye, Inc.

Finalist – Steve Smith, president and CEO, Equinix

Finalist – Robert Pera, founder, Chairman and CEO, Ubiquiti Networks

Published in Northern California

Jim Kudis and a partner started Allegheny Petroleum Products Co. for the same reason many people start a business — they loved what they did and saw a niche that their company could exploit.

While the company, a manufacturer of industrial lubricants and additives, was seeing annual growth of 20 percent in its early years, Kudis and his partner struggled with money and didn’t take a salary for the first year or two.

“Most small businesses are generally undercapitalized, which we were,” says Kudis, president. “We lived off whatever money we had, which definitely helped because it cut back on the expenses and some of the money going out the door.”

Starting a business is 24 hours a day, seven days a week. You have to live it and love it. You have to roll up your sleeves and do anything you have to do to run that business.

“If you don’t want it that bad, don’t do it,” Kudis says.

The company’s focus in the beginning was providing industrial lubricants to the various manufacturers in the Pittsburgh area. Back then the major oil companies were retreating from the marketplace, becoming very big and going through distributors. Most of the distributors didn’t have the technical know-how of what the lubricants do and how they work.

So Kudis saw a void in what the major companies used to be strong at and what the distributors couldn’t do and that ended up being the niche that Allegheny Petroleum jumped into.

“That was the big advantage to going into the manufacturing part of the business,” Kudis says.

Last August, Kudis and Allegheny Petroleum Products Co. celebrated 25 years in business. In December 2012, Kudis bought out his partner to become the sole owner of the 85-employee company, which saw 2012 revenue north of $110 million.

Here’s how Kudis has grown Allegheny Petroleum Products Co. from a start-up into a successful organization.

Bring in the right talent

While Kudis and Allegheny Petroleum struggled with capital early on, the turning point for the company came around its fifth or sixth year in business.

“We were supplying one of the plants in Cleveland and we made a proposal to do what was a new concept at the time, fluid management,” Kudis says. “We had to put in 125 bulk tanks, which are carbon steel, 500-gallon tanks that ran about $1,500 each.

“So we had to make a more than $200,000 investment to put these tanks in and put in consigned inventory, which ran us another couple of hundred thousand dollars. So we were about $400,000 into this.”

A year later the global buyer for that company called Kudis and told him what a great job Allegheny Petroleum was doing managing their Cleveland plant. He offered Kudis the contract to manage the company’s remaining 70 plants.

“So off it went and today they are my largest customer,” he says.

From that point on, the business has had to function much differently and required new skill sets to keep the company growing.

“My biggest focus today is making sure my managers have all the tools and things they need to do their job, whereas 20 years ago I was doing it myself,” he says. “Now it’s managing people, keeping them excited, making sure they have ownership in the things that they’re doing, and have the tools to do the job that they need.”

Allegheny Petroleum has five fairly distinct areas and Kudis is in touch with each one of the people that manage those areas.

“I’m not trying to do their job, but I’m trying to help them so they can do their job and that’s the key thing,” he says. “It’s all about people.”

To find the right leaders for his business, Kudis chased those executives down and drafted them all.

“I handpicked them and coerced them into coming to work for the company,” he says. “I chose them because I saw the qualities they had. I saw a real desire in each one of them to do well, and that’s where my attention started.

“What I saw in my interaction with them was that they could handle themselves well and present themselves well in front of people. They were knowledgeable and wanted to be more knowledgeable.”

The first thing Kudis looked for in the people he brought in was whether they were good quality people and good solid citizens.

“That’s probably the common thread through most of the people who work here,” Kudis says. “Talent would be second after that — they can manage people and enjoy the ownership of their part of the business. They embrace it and treat what they’re doing like their own.

“It’s just looking in someone’s eye and seeing that they have a desire to do well, not only for themselves, but for the company too. A lot of people want to punch in, get a paycheck, punch out and go home, and that’s not the kind of people I want managing.”

Kudis gives his team the autonomy to do things on their own, which means they have the power to make decisions.

“I give them a free hand to do what makes sense,” he says. “My motto is to make the decision on your own and if you don’t think it’s your decision, then come to me. As long as you have an explanation about why you made that decision, you’re never wrong. You’ve got to be in the game and engage and make decisions.”

Decide how to grow your business

Making decisions is a very important aspect of running a business, especially when it regards growing your company to the next level. Kudis has had to make countless decisions over 25 years and each one helps the company continue its growth. Now those decisions rest on the shoulders of his managers.

“That’s what I expect from the people in a management role,” Kudis says. “In the dealings they have, there comes a point where maybe it’s beyond where they should make a decision on something. In involving putting part of the company at risk or something of that nature, every one of them knows where that line is, where that decision should not be theirs.

“All the other decisions whether they are small, large or whatever, I expect them to make it. It’s really easy to say three or four days later that you made a wrong decision, but to be in the game and make the decision right there, to me that’s important as long as they have an answer why they made a certain decision.”

Every month or every other month Allegheny Petroleum has what it calls a What’s Up Meeting to check in on the different areas of the business.

“I grab each of the managers and we sit down for about two hours and we go around the table while everyone exchanges what they’re doing,” he says. “You get so focused on the part of the business that you’re in and sometimes you have two different groups sort of working on the same things, or maybe they’re doing something that somebody in another group has worked on and knows the answers to help them out. So those meetings have been very beneficial.”

One of the biggest decisions Kudis has made for Allegheny Petroleum was to give the company a global presence. However, global business carries many challenges along with it.

“Learning how to deal financially in different countries has been a challenge,” Kudis says. “One thing you have to learn is what the tax implications are. Each country is different. You should do business with an accounting firm or law firm that can find out answers for you. That really makes it easy.”

Allegheny Petroleum didn’t utilize those resources in the beginning on the first two countries where the company launched its efforts and there were snags.

“Had I used our law firm or our accounting firm, it would have been a lot easier,” Kudis says. “Make sure you understand what it takes to do business in a foreign country before you start doing business there.”

Another big decision that has streamlined business for the company was using a global pricing index with its major direct customers.

“We now move our pricing quarterly as these prices move,” he says. “In the past every time there was an increase you had to go in and present everything to your customer and sit and argue about the pricing. Now that it’s indexed at the end of the quarter, it’s just a matter of how the pricing has moved and that has really streamlined the pricing.

“Our customers feel very good because they know it’s indexed to something that they can see. I feel good because as my raw material costs rise or drop it keeps my profits pretty steady. It really makes it easy to not worry about the pricing side of your business as much.”

Now that Allegheny Petroleum has streamlined business, entered into global markets and become a substantial player in its industry, Kudis is excited to find where the next level is.

“My vision is how do I double and triple the business,” he says. “Everything had been done organic and we might look at doing some acquisitions. The next level will also mean being more global.

“You have to think down the road and get out of the box to think about things that maybe you haven’t thought about in the past, because once you stop growing you’re done.”

How to reach: Allegheny Petroleum Products Co., (412) 829-1990 or www.oils.com

 

Takeaways:

Find the right talent for your leadership team.

Give the leadership team the autonomy to make decisions.

Constantly look at how to keep growing your business.

 

The Kudis File

Jim Kudis

President

Allegheny Petroleum Products Co.

 

Born: Homestead, Pa.

Education: Graduated from Penn State and received a bachelor’s degree in business logistics.

What was the very first job that you had and what did you learn from it?

I worked in a steel mill. I was a laborer so I drove a high lift and moved different things around. My dad worked there and he said, ‘This man is going to pay you, so you better work so that you make sure you earn every dollar you get.’ I still live by that today.

Who is someone that you looked up to?

My grade-school basketball coach. If we played bad we would come back and practice until 11 o’clock at night to make sure we did things right. We won the state championship that year. Hard work eventually pays off.

What Allegheny Petroleum product are you most proud of?

We make what’s called a backup bearing oil for the steel mills, which is called a Morgoil. When steel mills roll steel it goes between these rolls and on the end of these rolls there are bearings. They are huge bearings that get very hot. The oil goes through to lubricate the bearings and they also cool the bearings on the outside with water to keep them from getting too hot.

So the oil has to be able to accept water and kick out the water as it goes back to the tank and it gets circulated back through the bearings. You don’t want water lubricating your bearings, so our oil kicks out the water pretty good. That’s one of our hallmark products.

If you could speak with one person, whether from the past or present, with whom would you want to speak to?

Joe Paterno. I admired the way he ran the football program at Penn State. I’m not in total agreement with what happened at the end of his career. All through the history of what he did, he represented a class act. He was very well-respected. I enjoyed watching him and what he represented for the school.

Published in Pittsburgh

When Michael Armento talks about Philadelphia being a tight-knit community, he speaks from the heart. As a young boy, he would often take a ferry across the Delaware River from New Jersey to South Philadelphia where his father worked for the U.S. Navy.

“There is some history and there are some good memories here,” Armento says.

This memorable locale from his childhood is now the place where Armento goes to work each day as leader of the Philadelphia market for Red Bank, N.J.-based Torcon.

That sense of belonging he has always felt for the area was front and center in Armento’s mind eight years ago when the construction management firm set up shop in the City of Brotherly Love.

“What we set out to do was hire only employees local to Philadelphia with deep roots in the region,” says Armento, a vice president in the firm. “Philadelphia is a very parochial community and we knew that for us to succeed, we had to base our Philadelphia office with Philadelphia-based employees.”

Armento and John DeFazio, Torcon’s project executive, felt strongly that potential clients in Philadelphia wanted to do business with people that they felt a connection to, people who understood what they were all about.

At the same time, Torcon was not a new company. It has more than 200 employees and is one of the most active construction management firms in the Mid-Atlantic region. Torcon has done more than $4 billion worth of construction in the past decade.

“The challenge for us was to learn how to introduce Torcon to the local Philadephia community,” says Armento, who has more than 30 employees in his Philadelphia office. “In the beginning, it was a lot of knocking on doors to visit with people John and I knew from years back working in Philadelphia. It was spending a lot of time out on the street, getting out there and introducing ourselves.”

The effort has paid off in the form of 3.5 million square feet of construction work in Philadelphia, amounting to $70 million in 2011 revenue and about $105 million in revenue for 2012.

Here’s a look at some of the steps Armento has taken to build a team that could make those valuable connections and ultimately drive growth.

Set clear standards

If you’re looking to establish a strong presence in your community, make sure your employees and everyone on your leadership team is up to speed with your expectations.

“Our strategy can be very complicated if it’s ambiguous,” Armento says. “We’re in the construction management business. The reality is it’s a customer service business where our client always and without exception comes first.

“I try to provide clear and candid communication with our employees on whether they are excelling or falling a bit short. I’m forever reinforcing the importance of Torcon’s core values so that any confusion is eliminated.”

The message is often conveyed through the prism of Torcon’s own strong history of close relationships. The company was founded by Benedict Torcivia in 1965 and is now run by his sons, Benedict Jr. and Joseph.

“As far as we are concerned, in every respect and in every level of service we provide, we act fairly, with integrity and with honesty,” Armento says. “Ben and Joe are the two brothers who run this organization and through an incredible amount of hard work, they have built a stellar reputation for the company.”

But without the constant reinforcement that helps drive smart decisions, a reputation that took several lifetimes to build can collapse in an instant.

“That is so true in our industry of construction,” Armento says. “It’s very competitive and you work hard to finally win a project for a client that you have been pursuing for quite some time. It’s not just winning the project. You have to work very hard to be sure you are providing the services that the client is expecting.

“All it takes is one little error or mistake and in five minutes, that reputation can be ruined. That is what I teach and profess all the time. Try to look at things from the perspective of your client.

“Then you can understand what is important to them,” he says. “Business is built on reputation and performance and we have to show that in everything that we do.”

Performance has to be strong at all levels in order to maintain your great reputation. If a project is late in being completed, exceeds its budget or doesn’t fulfill your customer’s expectation, it’s clearly not a success.

“The definition of success is when a client says to us at the end of a project, ‘You folks at Torcon delivered on every promise and every commitment you made from the outset of the project,’” Armento says. “That is when we know we were successful in executing the project. We want to be sure that everyone involved views the project as a success and not just the construction manager.”

It’s the difference between possessing a reputation based simply on knocking out projects as quickly as possible and one that is consistently focused on a high level of customer satisfaction.

Reinforce the team concept

One key to building a team that is of one mind and can make strong connections with your customer base is to empower them to do what they do best. Build confidence in your people so that they know you see them as the experts at what they do. Create an environment where they don’t need to check in with you every time a decision needs to be made.

“We try not to be dictatorial,” Armento says. “We believe very much in allowing our people to be autonomous, to allow them to express their opinion and tell us about their findings and what they think the solution is to a particular challenge. We want them to feel like they are an integral part of the solution to problems on projects. When they do, they take ownership in solving those problems.”

Teamwork is part of the culture of the construction industry from your earliest days on the job, no matter where you work.

“Most people who are educated in construction management or construction management-related curriculum understand that every project is performed and completed by a team of those core positions,” Armento says.

“If there is a particular portion of the project that is struggling and needs some extra attention, we would expect the other team members to jump in and help out. It’s understood in our industry that it’s a group effort.”

Teamwork can easily fall apart, however, if that commitment to your team begins to waver or if you begin to provide evidence that you value one group in your organization over another.

“The key is to be consistent with your message and spend as much time listening to your people as you do talking to them and providing direction,” Armento says. “It’s essential for us to reinforce our message and reaffirm our employees’ value to our organization.”

When employees come to you with ideas or suggestions about how to do something better, demonstrate that it hasn’t been a waste of their time to come up with this new idea.

“It becomes a matter of personal pride,” Armento says. “If an employee has an idea after living with a certain situation day to day, they want to know that the time they have spent thinking about how to improve our approach is valued time and that their opinion is respected by management.

“When you hear an employee or a staff member who has a good idea on how to do something better, allow them to act on it. Give them the opportunity to take ownership if it was their idea.”

Take the time

You work each day to build a stronger team that is focused on providing the best service to your customers. Armento felt that was a winning strategy to achieving customer satisfaction.

But to drive home the connectedness that he wanted customers to feel with Torcon’s Philadelphia operations, Armento strongly encourages participation in the community.

“I’m a newly appointed board member with the Delaware Valley Chapter of the Cystic Fibrosis Foundation,” Armento says.

He’s also involved with the American Heart Association and took part in the company’s effort to do a 9/11 memorial along the Schuylkill River.

“That was done gratis by Torcon along with a group of subcontractors,” Armento says.

These efforts were part of an overall push to show potential customers in Philadelphia that Torcon understood what they were all about and could relate to what it meant to be part of the Philadelphia community.

“The way we have overcome that challenge is one, to make sure everybody we employ here in the Philadelphia office comes from Philadelphia construction,” Armento says. “And two, to entrench ourselves as deeply as we can in the community and with community functions.”

How to reach: Torcon, (215) 271-1449 or www.torcon.com

The Armento File

Born: Camden, N.J.

Education: Construction management degree, Drexel University, Philadelphia, Pa.

What was your very first job?

My first job as a kid was working for a local concrete contractor who did replacement sidewalks and driveways. My job was to break up the old concrete in preparation for the new. If it did anything for me, it gave me an appreciation for the difficulty of laboring on a daily basis.

What is the best business lesson you ever learned?

This is a very challenging business. We rely heavily on the performance of others in order to make a project successful. When I say others, I mean our own people as well as other members of the team.

To the best of your ability, try to manage situations on a project without emotion. Treat people the same way you expect to be treated. And that is coupled ironically with the understanding that you can’t blindly trust everyone. Remain objective and keep the clients’ interests in mind at all times.

What skills are essential for a leader?

Be firm when you need to be firm. Listen to people as much as you talk to people. Recognize it’s not always about issuing directives and establishing policies. A good leader sometimes has to be a teacher, a cheerleader and sometimes a confidant. Be open to your people when necessary, but be firm when being firm is necessary.

Takeaways

Set clear expectations.

Promote a team concept.

Be civic-minded.

Published in Philadelphia

For Philip Rielly and Eric Hill, the past five years have been a very different experience compared to most others in the business world during that time. While many companies were hunkering down, cutting back and fighting to stay in business, Rielly and Hill were nurturing the healthy growth of a young company.

In fact, in just the past three years they have seen their company’s employment and revenue double. Rielly and Hill are co-founders of BioRx LLC, a more than 200-employee national provider and distributor of specialty pharmaceuticals they started in 2004.

Hill, who is vice president, is located in North Carolina, while Rielly, who is president, is in Cincinnati where BioRx is headquartered. The company, now nine years old, has been exceeding expectations, and there are no signs of it slowing down anytime soon.

“Since 2010 we have continued our strong growth trajectory as we hoped that we would,” Rielly says. “We finished this past year north of $100 million in sales. We’ve been fortunate to launch a number of new semi-exclusive products with some of the different manufacturers.”

Since 2010, BioRx has become a prominent player in the Hereditary Angioedema space and a major player in the Alpha-1 antitrypsin deficiencies space.

“Some of the other changes since 2010 are we announced that we were going to be a semi-exclusive distribution partner for a firm out of New Jersey called NPS Pharmaceuticals and we opened three new regional pharmacy and distribution centers,” Hill says. “Those are in Boston, Scottsdale, Ariz., and San Diego, Calif. Those are three large investments for us.”

Needless to say BioRx has been doing the right things to remain on a growth track. Now Rielly and Hill have to keep it going.

Here’s how they have grown the company through strategic planning and developing the right partnerships.

Take advantage of growth drivers

When Rielly and Hill first started BioRx, they had a different idea behind specialty pharmaceuticals than most other national companies. While others were switching to a less personalized mail order model, Rielly and Hill saw an opportunity to offer a higher care model and focus on the patient.

Since seeing that opportunity they have been aggressively pushing the company forward.

“We’ve taken a bullish approach from day one when we set the company up, and we’ve been very aggressive with respect to adding new geographies and new regions,” Rielly says. “We’ve certainly added quite a few new account managers in the field, so we really focus our market on the four P’s in the pharmaceutical space with respect to customers.

“In the physician marketplace, we’ve expanded the number of representatives calling on the physicians across the country to open new geographies to where we’re now truly a national company.”

The biggest driver for BioRx at this point has been developing relationships with the different biotech companies and manufacturers.

“They’ve entrusted us with some of their new therapies,” he says. “In many cases we are just one of a handful of companies in the world who has access to selling these drugs. We’ve been very fortunate to be able to get those relationships.”

When a company is growing at the rate BioRx has, it is often easy to focus on one big area of growth and forget about other areas. That has not been the case with BioRx.

“This hasn’t been a one-trick growth pony,” Hill says. “We’ve purposefully and carefully invested in multiple strategies that have the opportunity to provide us growth. We’ve executed pretty well on all of them, but the key thing to take away is that we haven’t put all of our eggs in one basket in terms of our strategy to provide continued and sustainable growth for the company. It’s been a measured approach across many fronts.”

Over the course of the business as it has scaled, Rielly and Hill have continued to reinvest in it.

“We’ve taken every dime of free cash that we can find and judiciously invested that into both infrastructure to allow us to grow, but most importantly into infrastructure that provides that growth such as opening new markets, hiring sales people, adding new product lines and adding infrastructure,” Hill says.

“At the same time, we have to ensure that we’re not getting ahead of the company’s ability to finance it so we can maintain a robust and strong balance sheet, which is a business killer for a lot of small companies.”

While maintaining a strong balance sheet is one challenge of a growing company, there are many other obstacles that come along with growth. One challenge is hiring.

“Even with the unemployment rate at what it is, I would say that we still have a challenge finding and recruiting some of the very best people,” Rielly says. “We set a very high bar for the quality of folks that we hire. We’ve really had very little turnover, but with the continuous growth we’ve enjoyed, it is a challenge to continue to grab those folks.”

One strategy that BioRx has implemented is hiring people for an associate-level sales position and having them train with more senior employees to learn the ropes.

“It eliminates some of the risk down the road of having a bad hire,” he says. “We’re also working closely with some of the local universities. That way we have an in on recruiting down the road, and it’s a good way for us to give back.”

Another way the company stays on top of hiring challenges is to be on the lookout for great candidates all the time.

“It may not be today, but it may be three months or six months from now that we’ll need talent,” Hill says. “When the opportunity to hire somebody comes along, we need to already have a portfolio of folks we’ve been talking to. That dialogue helps gets those jobs filled quicker and with better talent.”

Develop strategies

Most of BioRx’s growth to this point has been organic growth. However, Rielly and Hill are always looking for the next partnership that will benefit the company and its patients. Last year the company made an acquisition to help it reach new customers.

“Coagulife Pharmacy is the only acquisition that we have done to date,” Rielly says. “Our strategy from day one has always been through internal growth and continuing to reinvest in new talent and organic growth. But Coagulife presented itself. That situation was a unique opportunity for us to add a different skill set.”

Coagulife deals specifically in the hemophilia space. Many hemophilia patients have target joint bleeds and what ends up happening is many of them require an orthopedic procedure down the road. Many of those can be avoided or helped with some type of aggressive physical therapy, which is what Coagulife offers.

“So we’re rolling out a national program that is very specific to physical therapy and exercise regimens,” he says.

A large part of BioRx’s ability to find strategic partners and develop those relationships is because the company makes it a priority to plan for those kinds of things.

“You have to have a plan, but also the wherewithal to follow through on a plan without respect to different challenges that come up,” Rielly says. “Whatever the long-term plan is you have to stick with it and keep going forward even when it doesn’t feel comfortable from time to time.”

BioRx thinks of strategic planning in the two-to-five-year range.

“The easiest thing for us to plan is organic, new market openings and sales infrastructure growth by prioritizing the markets we believe have opportunity in each of our business units,” Hill says. “Then it’s just budgeting out the velocity with which we can deploy capital and money to put those people in place to enter and burst into new markets for us.”

Rielly and Hill constantly talk about the next five markets the company is going to crack into with a new therapy or a sales rep to put an operating unit in place.

“We’ve done a good job of sticking to that,” he says. “We kind of know where our next five, six, seven, or eight investments are going to be and in which business units we want to be plunking those bets down.”

During the strategic planning process you have to be willing to think about some far-fetched goals while also being reasonable about what can be achieved in your plan’s window of time.

“Dream big and shoot for the stars, but be realistic with respect to what it’s going to take to achieve those goals,” Rielly says. “Be realistic with how much capital it’s going to require to get from point A to point B. But don’t be afraid to dream big and swing for the fences.”

The key to achieving goals set forth in a strategic plan is having a great team around you.

“If we have done anything, we have hired a fantastic management team and our bench strength is pretty deep,” Hill says. “I think either one of us could get hit by a bus tomorrow and the company wouldn’t have a whole lot of issues. We have managers and operators that we turn loose to let them earn their stripes. Those guys know where our next bets need to be.”

How to reach: BioRx LLC, (866) 442-4679 or www.biorx.net

Takeaways

Determine your growth factors.

Develop strategic partnerships to help expand.

Have a planning process for the future.

 

The Rielly and Hill File

 

Philip Rielly

President and Co-founder

BioRx LLC

 

Eric Hill

Vice President and Co-founder

BioRx LLC

 

Rielly: Born in Cincinnati

Rielly: Education: Graduated from Spring Hill College in Mobile, Ala., with a BS in business communications.

Hill: Born in Bassett, Va.

Hill: Education: Graduated from Wake Forest University with a degree in psychology.

How did you first meet each other? And why did you start BioRx?

We both met working for another national company. We saw the trend of many national companies going to a mail order model with less personalized care, and we felt that we could create a market by going with a higher care model.

What has been your favorite thing about growing BioRx?

Rielly: The most rewarding part is building a team and watching the team grow. We’re making a very positive impact on the lives of each of the patients in which we touch and there’s not a week that goes by that we don’t get a patient testimonial about the ways our team members went above and beyond. I find that extraordinarily rewarding.

Hill: It is awfully refreshing to wake up every day knowing that we get to set the direction. It’s a lot of fun being in an entrepreneurial environment and getting to spread that spirit around the organization.

What excites you both about the future of BioRx?

Hill: I’m excited about the fact that sooner than later we are going to be a $200 million company. We also have a new drug launch happening and it has the opportunity to be a significant sea change in both the lives of the patients that we’re treating and the marketplace for one of our operating units in a way that’s transformative.

Rielly: In the last few months, we’ve aggressively hired and opened new geographical territories and I’m excited to see the initial successes. We have the best team in place that we’ve ever had and I’m excited for them to achieve their personal goals.

Published in Cincinnati

This past November, Andrew Liveris went to the White House for a meeting with the president. That in and of itself is a pretty significant life event, but in Liveris’ case, it was as much about the journey as the destination.

Liveris is the chairman, president and CEO of The Dow Chemical Co. A native of Australia, he’s held numerous positions at Dow over the span of nearly 40 years — roles that have taken him to places such as Hong Kong and Thailand, before eventually moving to Dow’s Midland, Mich., corporate headquarters, where he became CEO in 2004 and chairman in 2006.

As the head of a $57 billion corporate giant, Liveris was among a group of influential CEOs invited to the White House to take part in a meeting on jumpstarting American business with President Barack Obama.

The Australian who came to America by way of Asia now sat in a room with the leader of the free world, among those tasked with helping to chart a course to rebuild key economic drivers as the country — and world — continues to recover from the recession.

“The conversation we had, with a dozen CEOs across various business sectors, it felt like a different meeting than any previous we have had,” says Liveris, who spoke as part of a presentation at the 2012 Ernst & Young Strategic Growth Forum.

“The president has had a lot of things written and said, and he takes it pretty personally when he hears that he doesn’t know business. Frankly, the evidence over the past 3½ years is that he doesn’t work with business and doesn’t know business.

“So in this meeting, he didn’t talk all that much,” Liveris says. “He let us give it to him, and we let him know what it would take to create a growing America again.”

For Liveris, it was an opportunity to step back, reflect on where his company had been over the past few years, and where it was headed —  and what steps he and other influential business leaders would need to take to ensure that their companies, and the whole of American business, would remain strong into the future.

Understand the landscape

By his own admission, Liveris was kind of naïve in his first couple of years as a CEO, particularly when it came to the business community’s relationship with government.

“I thought I would go to Washington, talk about the things that matter to my company, then I would leave and something would happen,” Liveris says. “That clearly did not work.”

After a number of trips to Washington with little progress in developing the business-government relationship to the point that it produced results, Liveris realized that no one on either side truly had a grasp of the game they were playing.

“I remember when I was watching TV and hearing about how American manufacturing had to die, how it had to move overseas because of labor costs,” he says. “That’s when I realized that absolutely no one was getting this.

“No one understood innovation, technology, or how one invents. No one understood the business models of creation, of new wonderful things that help humanity, things that are an American right.

“We have done this for over 200 years and yet we’re saying we should no longer manufacture, and we should just be a service economy,” he says. “If you want to be a service economy, go to the U.K. and see how it worked for them.”

Liveris says Silicon Valley is a hub of innovation, in large part because it is full of big companies who try to maintain a small-company mindset. If you can marry the resources of a major corporation with the flexibility and creativity of a smaller enterprise, you can hit an innovative sweet spot. It’s a position Liveris has tried to assume at Dow.

“Silicon Valley is an intersection of incredible academic institutions and entrepreneurs inventing, innovating and allowing startups,” he says. “That’s what I do. I have $1.7 billion in R&D, and I’m doing that every day. I’m innovating and trying to scale up. That is manufacturing.”

Liveris wants Dow to set a tone for innovation throughout the country. He wants companies, both large and small, to think in terms of innovation and developing ideas.

“This country needs dozens of Silicon Valleys,” he says. “It needs innovation hubs throughout the country. That was recommendation No. 1 from the meeting with the president. The president will give legs to an advanced manufacturing partnership, within which we have identified 11 technologies that America can win on a global basis.

“We have picked the technologies where America can win, not by creating winners and losers among companies, but by designing an innovation hub so the best minds in America can participate, including entrepreneurs, big companies and some government money to stimulate creativity and scale things.”

Invest in human capital

Innovation needs fertile ground. It needs companies that invest in the resources that enable innovation. It needs executives and managers that sustain a culture capable of promoting innovation. You need programs that reward and promote innovative thinking.

But those factors alone won’t drive an innovative mindset. You need to recruit the talent to innovate.

Even if you don’t budget for R&D the way Dow does, Liveris says innovation-minded talent is a must for any organization that wants to grow and evolve.

“I am a great believer that rigor mortis sets in unless you create a burning platform,” Liveris says. “People get comfortable and complacent quickly, especially the larger you get as an organization. You have to change things.”

When Liveris was named CEO of Dow, he called up a number of successful CEOs who had succeeded in driving large-scale change throughout major enterprises, asking for advice on preventing complacency and enabling innovation.

“One of them gave me this great piece of advice,” he says. “It had to do with the phases of change that cause the human pipeline, the talent pool, to respond and be its very best.

“It’s about the moon shot, the mission. If I can be inspired by the mission, be energized by that, that’s the key. I have to create that dynamic inside the top and middle ranks of the organization, and more importantly, the front line people.”

To Liveris, leaders get elected every day. Each day is an opportunity to create buy-in throughout the organization, an opportunity to inspire employees to follow the path blazed by leadership.

“You lead change,” he says. “You build a team around change. You have to do it with the long vision in mind, but with the idea that the short-term needs have to be met. We all suffer from ADD.

“We have become an ADD society where everything is breaking news, so the dynamic around a company — particularly a public company — can kill the long vision. You have to deliver in both the short-term and the long-term, and if you live those two paradigms, you need a unique type of human talent.”

Liveris calls it “living intersections” — finding and developing talent that can achieve both short-term and long-term goals.

“No longer do we do single-lane highways,” Liveris says. “We’re living intersections all the time. The intersections between the short-term and long-term require a unique type of talent — sometimes we call that change manager a change leader but that’s too high level.”

The managers you bring in to help spur change and formulate a vision for the future while delivering short-term results have another important set of opposite-end factors to master: They must understand the business from a global level, while still grasping the effect of the vision and goals of the organization on individuals working at ground level.

“You do still have to get down to the three-foot level,” Liveris says. “What does it mean to the person on the floor? What does it mean to the R&D leader? What does it mean to the salesperson?”

And no matter what position a given person fills, that person’s talent will only reach its potential if you can tie their individual and department goals to the overall goals of the organization, and then reinforce innovation-centered values that emphasize a willingness to create, experiment and learn from mistakes.

“You can’t box people into something and say, ‘Go invent,’” Liveris says. “You have to give them a chance to fail. You have to let them be a part of the entrepreneurial activity. You need to motivate them to see how their project, their work, can change humanity.”

How to reach: The Dow Chemical Co., (989) 636-1000 or www.dow.com

The Liveris File

Liveris on Dow’s history of success: We’re actually one of nine companies that are still around from the inception of the New York Stock Exchange. There are only eight others who were there since the beginning. We’re not afraid of change. I didn’t get this gray hair easily; it came hard. We have in our DNA the willingness to face reality and take the change and bet the company. To be companies of size, that’s a lot of heavy lifting. I’d like to say we’re in the seventh inning … from a portfolio point of view. We have the technologies. We have the weapons but we’re in the second or third inning from a cultural point of view.

Culture is every person in the company, and Dow has a value proposition at the personal level. As a young chemical engineer, I had a lot of offers, but I chose to leave my great country of Australia to live in this great country, not because I think you’re greater but the company called Dow has a better value proposition to a human being. I was attracted by the people.

Liveris on sustainability: One day Dow Chemical won’t be known as Dow Chemical; it will be known as Dow. Dow sticks to the brand of the diamond (logo). The brand will stand for … our commitment to sustainability, but not sustainability as a noun, sustainable as an adjective. Sustainable business, sustainable profits, sustainable planet are the same things. How you actually marry the intersection between environment, economy, society, business, government, society.

Takeaways

Understand your industry.

Value innovation.

Find and retain great talent.

Published in Detroit

 

Interviewed by Dustin S. Klein

Dina Dwyer-Owens has led The Dwyer Group Inc. as chairwoman and CEO since 2007 and has guided service brands — including the iconic Rainbow International nameplate— to impressive growth during tough economic times.

The company, founded in 1981 by her father, Don Dwyer Sr., operates six other franchise businesses as well that provide cleaning, plumbing, electrical, HVAC, landscaping, appliance repair, glass repair, and related services through 1,600 franchises in nine countries.

Dwyer-Owens has worked for the Waco, Texas-based company since its inception. She recently talked with Smart Business about how she grew up in the company and how she has propelled The Dwyer Group’s franchises over the past six years to success in a sluggish economy.

Q. What did you do before you came into the company?

A lot of different things. Before The Dwyer Group, my father had his own car wash businesses. So at the age of 13, I was working at his car washes. I pumped gas and sold polish waxes. Then he had restaurants he was thinking of franchising. I worked in the restaurants and did a lot of catering. I worked in a full-service restaurant, and I was the hostess and a waitress. This was all in high school. There are six kids in my family, and we all worked from the time we were 12 or 13.

Q. What made you decide that this was what you were going to do, to rise through the ranks and take over the company?

I wasn’t sure when I first got out of high school. I attended Baylor University. My father wanted me to go to school for networking. He knew education was important. Going to school full-time and working for him full-time, I knew something had to give. It wasn’t fun doing both. I wasn’t getting the best out of either one of them.

I went to him one day and said something has to change. He said why don’t you just take the semester off and come work side by side with me.

I’ll never forget the day a franchisee came up to him at a convention and said, ‘I want to thank you for the opportunity you’ve given me. It has changed my life. Our family is doing things we only dreamt of doing because of this opportunity.’ I listened and thought, wow, I get what he means by his mission statement, which was very clear. Since we were kids, he always told us what his mission was, which was to teach his principles and systems of personal and business success so that all the people he touched could live happy, successful lives.

It’s not just about business success and making a lot of money. It’s what do you want out of your personal life, and how is this business going to help you with that? Working full-time with him for one semester, I learned more than I could have ever learned at school.

Q. What franchise did you work with originally?

It was Rainbow International, our flagship brand. Today it’s a restoration and cleaning company.

Q. How did you decide which opportunity to pursue?

When I worked with my father side-by-side during that semester, I was involved in the real estate division. I was doing stuff with the franchise companies. I was teaching new franchisees how to telemarket. And I traveled the world with my father being an ambassador for the company. He was doing that on purpose. He wanted me to know all of the things he knew.

Then by the mid ’80s, I was running the real estate company. I had a team of 28 people and ran about a million square feet of real estate, and still worked closely with him in the franchising part of the business.

I got involved in franchise sales. I generated a lot of leads. I was the top salesperson in ’83. My father kept me by his side and let me have the freedom to run the real estate division. At the same time, I traveled a lot with him. I loved learning and being part of that. Some of my other siblings weren’t as interested. They preferred to stay home. I spent a lot of time with him.

We went public in ’93. I was on the board of the public company. He started to have me sell off the real estate. He said, “I really need you full-time on the franchise side. Let’s get the real estate sold.” He died of a heart attack at the age of 60 in 1994, a year after taking the company public.

Q. Did you step in right away then?

Well, I was still selling the real estate division off, and we were building properties in the Cayman Islands. Seven Mile Shops was a property we owned there. I was responsible for leasing it. It was a new business we were building. I wasn’t the right person at the time to step into the CEO-president role.

A brother-in-law of mine who had been in the business since he was 16 really knew the franchise business and the development side better than I did, and he stepped into that role with the support of my sister, me, and a handful of professional management team members that my dad had surrounded himself with. He was very entrepreneurial.

After doing that for four years, I was VP of operations. The board knew it was time for a change. The president at the time was great, but he was a real franchise developer, not the best guy to do the day-to-day business.

They did a little shifting and asked if I would be willing to come in as the acting president and CEO. I was 35 at the time, and I knew there was some risk with the shareholders putting me in charge. I accepted the position of acting president, and got some push-back from some top franchisees that I wasn’t the right person for the job. I said, “Look, I get it. I’m not a plumber. But I don’t need to be. I’m the customer. Who better to run this business than the customer who understands what we should be doing for them?”

I said, “Give me six months, and if I don’t prove myself, I’ll be the first one to step aside and say find someone else.” In six months, the one guy who kind of led the bandwagon saying she’s not the best person became my biggest cheerleader.

Q. How many brands did you have?

We had six at the time. Today we have seven brands, and a software company. We have a buying group which is a wholly owned subsidiary. And we have handful of company-owned stores.

Q. How do you look for opportunities for those brands to expand?

First of all, it goes back to our mission. We’re very clear on how we can help our franchisees achieve the things they want in life, and we make the franchise the vehicle to help them do that. We attract team members who care about the franchisee’s personal success as much as their business success. It goes hand in hand. It’s organic.

Q. Can you give us some details about the investments you’ve made in training?

When you think about the business we’re in, the competency to train is a constant. You have to keep training the franchisees to create success for them. It’s such a big part of what we do. For most of our brands, it’s teaching the business side of the business. We have a lot synergies. We have seven different brands, so we can pool the best of all those brands and bring it into one training program.

We have a training facility in Waco where we do all of our core training. I teach the very first class to all the new franchisees. All of my key team members usually teach a class the first couple days of training. We pool the talent we have, and we can do the same classes for all seven brands, and they then break out to specific things.

Q. What matrixes do you use to measure performance?

The most important matrix is the net promoter score. We have a wonderful system that we have automated where we do the follow-up with the end-user customer on behalf of the franchisee. We will make the call to the customer after the service provider has been there to find out how the service was. It’s a 30-second survey. The most important question is “Would you refer us to a friend or family member?”

The scores range from negative 100 to positive 100. Our franchisees on average score a 74. This is home service. It’s kind of like paying someone to fix your car. Our franchisees are doing a great job taking care of the customer. Some companies are higher, but the average is 74.

Q. Do you put rewards or incentives in place for the franchisees?

You bet. We have what we call our Top Gun club. It represents the franchisees that not only do the most in revenue but fit a handful of criteria: profitability, leadership, and helping other franchisees grow their businesses. There are individual awards too. If you’re awesome at net promoter score or a team member, we will highlight them. The recognition from corporate headquarters means a lot to our franchisees.

How to reach: The Dwyer Group Inc., (800) 490-7501, www.dwyergroup.com

Takeaways

Learn all aspects of your business.

Pool talent to cross-train.

Use surveys to gauge performance.

The Dwyer-Owens File

Dina Dwyer-Owens

Chairwoman and CEO

The Dwyer Group Inc.

Education: Baylor University

Dwyer-Owens on communication: I’m taking communicating to a new level now. It’s called connection. It’s one thing to communicate, but it’s another to connect with your franchisees. We have a lot of methods of doing that. The most important method is we have franchise consultants who are really responsible for helping you grow your business and achieve your personal dreams.

Dwyer-Owens on training: We have lots of training events. There’s a lot of best-practice sharing. We have a leadership summit where we go away for four days every year. We bring the top folks from all seven brands. We have the best of the best, who then go back and educate the rest of the franchise family on what we’re doing, why you need to be involved in it, and how it’s going to make a difference in your business.

Dwyer-Owens on change: A couple of years ago, we found our franchise development was slipping. We weren’t keeping pace with new franchise units. We were not hitting the numbers that we were accustomed to hitting. So we totally re-engineered our franchise sales process. We brought people in from the outside who had expertise in managing complex sales, and we totally changed our process. We really had to shake it up, and we shook up the whole franchise development team. And we have already seen great results.

Dwyer-Owens on innovation: I sometimes drive people crazy, I think, because I’m so open to new ideas and innovation that sometimes they have to tell me to wait — aren’t we doing enough already? But I love the whole creative side of the business and doing things differently. It’s really my team that innovates. I may come up with an idea or two, but the team really makes things happen.

Published in Dallas

 

If there is one thing that doesn’t change much in good times or bad times, it’s alcohol consumption. Phil Terry knows that fact pretty well.

“Demographically over the years you can see that it’s pretty consistent,” says Terry, CEO of Monarch Beverage Co. Inc. “The economy affects it some, but it’s not like new car sales or home sales where a slight turn in the economy can have a devastating effect on demand. Our demand is pretty consistent; good times don’t spike and bad times don’t depress it that much.”

So why would Monarch, a beverage seller who does $275 million in business a year, step out of the box where its bread and butter lives and develop a non-alcoholic energy drink? Why bother to spend precious time and resources on something so peripheral?

The answers to those questions lie partially in a venture the company started a few years prior to the energy drink experience. A sales manager who was a real fan of exotic beers and the new trend of microbreweries suggested that the company start to focus on those products.

“He said we ought to pay some attention to these people because it is not like our mainstream brands,” Terry says. “There is not a huge demand for it. Maybe this was a way for us to distinguish ourselves from our competitors.”

That was the reason Monarch committed some resources to this, and launched its World Class Beer division.

“It has grown and worked out very well,” Terry says. “We were a little bit ahead of the wave on that. We created a network of other wholesalers that creates sales divisions focused on microbreweries and new and exciting beers.”

Meanwhile, back to the energy drink story.

“One of us had an idea that maybe we should get into the energy drink business,” Terry says. “We developed a product and spent some time and money formulating and getting it produced and putting graphics on it — and we still have a lot of that in the warehouse! It’s not doing too well.

“And the one of us who came up with that idea was me,” Terry says. “I’ve been reminded a few times that that wasn’t our finest move!”

Here is what could have gone better with the energy drink and how Terry keeps listening for whispers of innovation in an industry in which product demand is about as steady as a rock.

Try your best idea — and learn

There just isn’t a crystal ball that gives a clear picture of what’s ahead for a business. So you use your data, your gut feeling, and you try something new. As one investor is fond of saying, if you start with nothing and you fail, you haven’t lost anything. Even looking at the past doesn’t help a whole lot to explain why some things succeed and others flop.

“When I look back over the years at things that worked right or didn’t work right, many times the successes are due to serendipity rather than smart planning,” Terry says. “You try to plan, you try to have a vision for what is going to be the next thing, but the future is so unknown. It’s just a big challenge figuring out what is next and what you have to do to keep the business viable and committed and customers happy. It’s not easy.”

Focus groups and market tests are often prerequisites when a new product is launched because a great product alone isn’t enough. It has to cause excitement. Terry can attest to that about Etomic, his energy drink.

“It’s good stuff; all the blind taste tests that we did show that everybody loves it,” he says about Etomic. It was another aspect of the launch effort that caused serious problems.

“It was just the marketing,” Terry says. “Marketing means so much on how consumer products do. We just weren’t experienced with that, and we are still learning.”

Once Etomic was launched, it didn’t sell well. Nevertheless, Terry didn’t give up on the energy drink.

“We thought it would shoot off the shelf; it’s a good product,” he says. “But energy drinks are just marketed a whole lot different than alcohol is. “That’s an area, which we weren’t accustomed with. Alcohol has so many rules and regulations around it; the law prescribes what you can and can’t do.

“But with energy drinks, going in and buying shelf space is a common practice. We didn’t budget anything to buy shelf space. There are some barriers to launching a new product that we just weren’t aware of. Bigger companies pay for ideal locations.

“We haven’t given up on that drink; there may be something there, but in terms of innovation, that is one that didn’t work. We are learning, and we may get that right.”

You needn’t break the bank

Capitalizing on an innovative idea needn’t be expensive. The research and testing on the Etomic energy drink, let alone the costs of developing it, weren’t free, but when it comes to using social media, the cost is next to nothing and the benefits immeasurable.

When Monarch Beverage launched its World Class Beer division, it was a natural next step to use Twitter to help it gain a following.

“We have a free World Class Beer Craft Beer Locator iPhone app and Twitter accounts that tweet things like, ‘This account has a keg of a microbrewery’s Gumballhead and they’re going to tap it at 7 o’clock tonight,’ Terry says. “So we spread the word through social media, and people show up!”

Another low-cost idea that is bringing results at Monarch Beverage involves beverages — that’s right, alcoholic beverages.

Terry and his team saw a trend with his 650 employees having some increases in driving under the influence charges. Of course, it was off-the-job incidents, but Terry was committed to do something.

“Our creative department came up with an idea for a campaign that we run every major holiday called Have a Plan,” he says. “The campaign is to remind people that you need to plan your celebrations, you need to do it responsibly and in moderation, and as a result of that, we went from six to nine cases a year to two once we instituted this.

“We have a lot of innovations that we are proud of but that is one in which I think we can see a real impact on our fellow employees.”

Get the best rate of return

While you are looking for other innovative ways to control costs, and you plan on spending some money — to make more money — you naturally evaluate the ideas as to which would provide the highest rate of return.

Terry and his team launched a clinic that he estimates for every dollar spent returns $2.

“Our costs to insure the health of our employees were going double-digit every year,” Terry says. “We tried all the things people do to try to contain that: self-insure, use third-party providers, negotiate fees.”

He wasn’t getting the results he wanted.

“So a senior vice president came up with this idea for a health clinic,” he says. “The idea was to get more involved in the health of our employees. I thought it was the craziest thing that I had ever heard. We’re in the beer business, not the hospital business.”

The clinic started small, being staffed by a part-time physician’s assistant a few days a week. It has grown to the point now where there is a full-time doctor, full-time physician’s assistant, part-time physical therapist and a medical technician. It offers annual physicals for all employees, and an annual health plan for each that is designed by medical professionals.

“The health plan each year focuses on three behaviors: smoking, diet and exercise,” Terry says. “It focuses on those because we know that those are the three behaviors that we can affect. We can improve health and lower claims. And it’s been working.”

Employees rank the clinic as the most important benefit they have working for Monarch Beverage.

“We survey our employees every year,” he says. “We ask of them of their benefits, rank them 1 through 50, and the clinic always comes up No. 1. So it is not just that it is doing good things for our bottom line; it’s doing great things for relationships among all of us who work here.”

Even workers’ compensation claims can decrease, thanks to the efforts such as the clinic.

“Those claims have come down significantly over the years because we manage that in-house,” Terry says. “People are healthier, we are having fewer claims than with traditional health insurance and our workers’ comp costs have gone down.

“We are almost to the point of being an evangelist for the stuff. I do wring my hands about what affordable health care is going to do for us long-term, but whether this model is still going to work, but we are committed to it. The government would have to change the economics of all this pretty drastically for us to move out of this.”

How to reach: Monarch Beverage Co. Inc., www.monarch-beverage.com or (800) 382-9851.

 

Takeaways

Try your best idea — and learn.

You don’t have to spend aggressively.

Get the best rate of return you can.

 

The Terry File

Phil Terry

CEO

Monarch Beverage Co. Inc.

Born: Indianapolis.

Education: I went to undergraduate at Indiana University. I am a recovering lawyer. … I went to the law school at the IU law school. So I am a Hoosier from start to finish.

What was your first job, and what did you learn from it?

I worked at a gasoline station pumping gas in high school, a discount gasoline station called Payless. I learned the value of an education. It wasn’t physically demanding work, but I could tell it was not something I wanted to do my whole life. And that if I wanted more, I needed to be educated.

Who do you admire most in business?

I would say Steve Jobs, in terms of being an innovator and being able to help people become the most productive, to create an organization that everyone can be proud of.

What was the best business advice you ever received?

I read this in a Jim Collins book, and it was essentially, ‘Don’t bet the farm.’ The way he put it was, ‘Fire bullets before you shoot cannons.’ Don’t bet so much on an innovation or a project that you jeopardize the company. Don’t put yourself in a position where the innovation has to succeed or you create difficulties for you generally. That’s what we’ve been following. We try to be measured on what we do and not get overexuberant about trying to figure out how to find the next big thing.

What is your definition of business success?

Whatever your mission is, serve that mission, and that mission does not include making money. We don’t judge success here by how much money we are making. We believe that if we have correctly identified a valuable social function, and we’ve served that social function well, we will succeed and we will make money. Our definition of success is accomplishing the mission. Monarch Beverage’s reason for being is to sufficiently provide an ever-escalating standard of service to its customers and to responsibly enhance demand for its products. In other words, serve the customer, create demand for your product. That’s why we’re here. And if we do those things well, we will make money. If we don’t do then, well, we won’t.

 

Published in Indianapolis

June Ressler was looking over the financials of her company a few years ago that had grown past $20 million in revenue, and she was more than a little shocked. The workforce solution company that she founded in 1996, Cenergy International, didn’t have enough money to meet its payroll.

The recession hadn’t hit yet, there was no apparent theft under way, and no one had hacked into her accounts. And frankly, it wasn’t the first time the problem had occurred.

“We would absolutely run out of money,” says Ressler, president and CEO. “Our bread and butter is making our payroll and making sure that we make it every week. If any of our consultants ever thought that their paycheck wasn't going to be good, they absolutely would go join our competitor.”

It all came down to her bank’s position on her company’s line of credit. The situation was so tight that Ressler had to personally pay for the wages at times.

“There were some days, I would have to take money out of my personal savings account to be able to make payroll,” she says. “I finally was able to figure out that I needed the ability to have a relationship with a banker who you can call on Friday afternoon and say, ‘Hey, I am going to bump up against my line of credit. I’ll come in Monday, and we’ll negotiate a higher limit. And they’ll say, ‘That's fine, I am going to make sure that we take the cap off and you go for it,’ you know?

“That’s instead of a banker saying, ‘Oh, I'm not going to allow that, and you have to stop growing.’”

Ressler decided that it wasn’t the circumstances that were causing the wrinkles in her bank books but the size of the bank. She was thinking anyway of expanding overseas and that would involve money exchange and other matters. She knew she needed a larger bank — and now.

“I was originally with a regional bank,” she says. “So I found a larger bank. I just happened to find a great team that is really there for me and very supportive.”

Call it a cash flow problem, liquidity drought, temporary problem or whatever, but it has to be reckoned with because it’s just one of many growing pains companies in the energy growth center of Houston may have been experiencing.

“We just continue to grow like crazy and I guess for me, understanding what the next level is when you start to have a little bit of growing pains,” Ressler says.

Incidentally, she paid herself back.

Here’s how Ressler, a self-taught entrepreneur who has law and bachelor of fine arts degrees, handles company growing pains and drives her company beyond $250 million in annual revenue.

Give credit to the credit line

Rapid growth will almost always trigger growing pains. It may well depend on how you look at the bigger picture that influences how much those pains hurt.

Ressler started her staffing company in her own home office in New Orleans with one consultant. Some dramatic growth occurred after a series of circumstances including Hurricane Katrina when she doubled her employees from 50 to 100.

Once Ressler moved to Houston and drilled down into the foundation of standard operating procedures at her company, she understood what was going on.

“The way our business is, we get invoices from our consultants, and we pay them within five days,” she says. “We then invoice our client, and we don't get paid, in the best terms, for 30 days.”

The longer the time frame stretches the more problems it can cause.

“If there are issues with the invoice, or whatever, sometimes it becomes 45 days, sometimes 60 days — so you can see we need our line of credit,” she says.

“Even in 2009 we grew by 5 percent when everybody else was hurting. Things were hot, so we were growing all the time and when we've got these explosive years where we are growing by 30 and 40 percent, we really need that line of credit because we are paying people like crazy.”

Ressler says it is never a cash flow problem as long as your line of credit stays out in front of you. With a satisfactory line of credit from your bank, you can meet your payroll and keep your employees from deserting you.

Cenergy now has grown to 1,400 consultants, and operations are managed by an office staff of 65.

See the forest

Once a new bank starts to plug the hole in the payroll dike, the spotlight will then turn to your staff levels. Do you need more employees? More managers? Where? How many?

“I have to sit back and say, ‘OK, I think I need to hire a manager for this area,’” Ressler says. “It is just kind of sitting back and thinking about what do we need for the next couple of years, you know?”

The scent of midnight oil burning starts you thinking about workforce levels.

“I worry because when I am in my Houston office, and I see some of my staff staying until seven and eight at night, that is not alright with me either. So then I’ll say to myself, ‘OK. We have a lot of people staying late now; I think I need to hire another manager.”

Ressler anticipated a lot of growth for a couple of years and assembled her managers to discuss solutions.

“I said, ‘I need you guys to make sure all of your staff and your teams are all well-oiled machines because, hey, hold on to your hats! I think we are going to have a couple of good years of growth here, and we can't have holes — we can't have balls being dropped,’” she says.

Ressler and her team devised an equation that they use to calculate staff levels.

“We do have kind of a rule of thumb, depending on the different areas — if we have grown by so many consultants, then we know we need to add X amount of new invoice people and additional recruiters — it all depends upon the opportunities that we are getting.”

Hovering overhead, however, is the matter of profit margins. You have to take that into account because it differs from industry to industry. Those industries that operate on volume have other concerns than those that don’t when it comes to adding personnel.

“Because we are a provider of personnel to the oil folks, and there are lots of competitors out there, when we are negotiating our global contracts, our profit margin is based on volume,” Ressler says. “It is not a typical profit margin as it would be in other industries. It is a very small profit margin. So as a result, we have to run lean, very lean.”

That means no padding the payroll. Every staff addition has to be justified, even more so in a lean operation.

“What we kind of do here is, ‘Pile on the work until there is enough to hire three more people and then hire one,’” she says.

Be honest and transparent

Every company has its own take on how to hire the best people. Ressler learned early that she couldn’t be involved in the hiring process because it may be tough to deal with and understand people — and that set the pace for the process.

“I learned early on that I am not a great person to hire people because I am the type of person that ... I just love everybody I meet,” she says. “I find something great about everyone, and then I'll hire the first person.”

Ressler delegated the hiring of her office to a lot of others, specifically the HR team and managers.

“We've got now a great thing where we have different levels of interviewing to make sure that the person who is being interviewed is touched by different managers on our team,” she says. “We get feedback from all sorts of levels before we actually hire. Because you think that a person is good doesn't mean they are good.”

Transparency is of immeasurable value if you think your company differs from the average one. Ressler says candidates are told that they should be ready for something of a maverick.

“It's a very tough thing to get the right people on your team to fit our type of culture,” she says. “Our company culture is very different from a lot of companies because we've got to run lean, and we are more like a renegade company where you might be hired to do a certain job, but you're not going to get a lot of training because nobody really has time to train you.

“You are expected to come in and run with the ball. Also, you might end up having to do things that you didn't early anticipate because somebody else might have left and that portion of their work might be swinging over to be under you. That's just how we are.”

Ressler says, nevertheless, working for a maverick company in growth mode is kind of exciting.

“Our office… I love all people who work here,” she says. “We have a close-knit kind of family atmosphere. Sometimes it is hard to make a decision to let somebody go because it is not that we don't like them as a person but everybody here is so wonderful — but it has got to be business. If they are not performing the job we need them to perform; you can't keep them just because they are really nice. It is a hard lesson for me and my managers to continue to learn. But the short learning curve can give you a quick look if the person is going to work out or not.”

How to reach: Cenergy International, (713) 965-6200 or www.cenergyintl.com

Takeaways

Find a solution to banking woes.

See the forest, not just the trees.

Be honest and transparent when hiring.

The Ressler File

June Ressler

Founder, CEO and president

Cenergy International

Born: Pittsburgh.

Education: I went to the Hartford Art School at the University of Hartford so I have a bachelor’s degree in fine arts. Then I went to Pitt law school so I have a JD from the University of Pittsburgh School of Law.

What was your first job and what might you have learned from it?

I came out of art school and was lucky enough at the time to get a job as an art teacher in Pittsburgh. I really learned a lot then. I really didn't know myself at the time. I had no idea that I was a serial entrepreneur. So I started my job as an art teacher and immediately hated it. I would find myself crying on Sunday nights because I was so bad. Then it occurred to me that it was because I was in a box. As a teacher, I knew exactly in five years how much money I was going to make, when I was going to have a lunch, what my schedule is going to be, and that was way too confining for me. But I stuck with it for four years, and learned that I need to be able to do something that allows me to have my freedom and kind of run with it. So after that, I bought a gourmet food store and ran that for a while. That was the beginning of my entrepreneurship, and I realized then that I could never work for somebody again.

What was the best business advice you ever received?

Every bit of business advice that I received has been good. I evaluate it all. I use what I can. It's pretty crazy. I really never had a mentor. It's funny because I really haven't worked for anybody. I never worked in the corporate environment. My father was a dentist. My mother ran his office, and maybe I grew up seeing how they were a well-oiled machine and it worked great for them. Maybe I inherited some of that from my mother but maybe it is being a woman; I am kind of under the radar.

Who do you admire in business?

There are a lot of very good business people out there that I admire but the thing that I get disgusted with is the competitiveness and the cutthroat nature of business. What I really admire are the business people that I run into who are more concerned about their environment and their staff and taking care of their people because I know whenever you take care of your people, the money follows anyway. I enjoy sharing stories about people that are environmentally safe, that encourage staff to be extremely safe and giving perks to staff and treating them the way they want to be treated is essential.

Ressler on what’s ahead for Houston employment:

I think a lot of our clients are getting smart and realizing that there is a lack of expertise. Clients are creating a lot of training grounds now where they are bringing people in that are just graduating and getting them out and training them so that they can learn quicker and become the types of people that they need a job, which is a great thing to see. I know a lot of our clients are just hovering over the engineering schools, waiting for these young engineers to come out and just get them started. To be graduating with an engineering degree right now is an amazing thing to be. You’re in high demand.

 

 

Published in Houston