How a sizeable firm can still deliver the goods with personal touch of a small company

Curt Moody, president and CEO, Moody-Nolan Inc.

Curt Moody was finding it tough in a down economy to find construction projects for his architectural firm to design. And the competition was like none he had ever seen before.

“One of the difficulties in this market is the small firms are doing everything they can just to survive ― and the large firms are doing the same,” says Moody, president and CEO of Moody-Nolan Inc. “The large firms are coming after the smaller work. A lot of times, clients are looking to say, well, they would prefer the personal touch of a small firm on a certain project type.”

So to address this challenge, you need to set up your firm to respond to both ends of the spectrum.

“We build our practice around being able to service and give the personal touch by having our project teams small enough to be able to respond in that way,” he says.

“But there’s the understanding that, let’s say, when a schedule gets pinched, you need to be able to add personnel quickly, so you need an approach that allows you to augment your core teams with other staff members when necessary.”

It was even more of a challenge since he built his company over the last 30 years, and to his credit, it is now the largest African-American owned and operated architecture firm in the country ― 162 employees work at the $26 million organization.

You’ll find that restructuring is not magic in itself, and it will still take you some solid selling efforts to overcome what might be assumptions about a larger company.

“When you reach over 100 employees, clients just look at you as a very large company and impersonal,” Moody says. “So work very hard to show that with your past clients, what you committed to them you fulfilled.”

You will need to explain to prospective clients that you will do that for them as well. Make sure you focus on how well past clients of similar size were satisfied.

“You will have good client references if the new clients want to dig into that,” Moody says.

The composition of the project team is important. To maintain the small company feel, you should have the team that presents the initial sales pitch be the same one that carries out the project. If your company is divided into specialty areas, you can make the head of the particular division the point person to serve as the project’s executive. He or she would name a project manager who would choose a team of very experienced people in that project type.

“They are all going to have the skills that any of your competitors will also propose ― but you’ll have them,” Moody says. “The team is built around those skills but the responsibility is to service the client. Therefore, they have the responsibility of getting to know the client more than just as a project, so you can address their overall needs, not just the specific needs of a one-time project opportunity.”

When you discuss the client’s needs and budget during the sales pitch, again use a small business approach.

“What you should try to say is that you can fulfill those base needs, making sure you give them the full program, that you meet their budget, meet their schedule, and by the way, you are going to be as innovative as they desire,” Moody says. “So it’s basically the client’s determination how far you go, not your own, because you can go from one extreme to another.”

In other words, you should show a client what the client has asked you to do, and then show what you can do that expands on what they asked for.

“Try to show them that you can meet their basic criteria ― here it is ― but they have an opportunity to go beyond that and here’s how you can still meet their criteria and go beyond what they might have been thinking,” he says. “And by doing that, you are giving your clients more choices than some of your competitors. That gives you an edge. You have to have a strategy that is going to work to help you be successful no matter whom the competition is.”

How to reach: Moody-Nolan Inc., (877) 530-4984 or www.moodynolan.com

Getting that next project

When Moody Nolan Inc. opened a new office in Dallas, Curt Moody knew one of the first orders of business would be to impress upon his staff the challenge of getting the next project.

“You can be very solid for the present,” says Moody, president and CEO. “But when you finish that work, what is next?”

If you don’t have something following quickly, you’re either going to have a large payroll expense during a time when you are not generating sufficient revenue for it or you are going to have to reduce expenses.

“A lot of firms are going to cut positions,” he says. “The problem is that you have gained some experience on that project and now you are letting it step away because you are waiting on another opportunity.”

You need to try to stay away from that and be in environments where you don’t vary your staff levels. Build upon the skills that you retained, keep the skills of that environment, and you can do better by maintaining a healthy workflow.

“You have to know when somebody has a dream,” Moody says. “You have to know when somebody says, ‘We are growing, we have a need. Should we consider building or expanding?’ You’ve got to hear about those things; follow it wherever you can find it, then follow up: ‘You know you are thinking about this ― can we help you?  Can we do an analysis or some planning to see what might be in your best interests?”‘

How to reach: Moody-Nolan Inc., (877) 530-4984 or www.moodynolan.com

Survive the recession by controlling the controllable

Jeff Heintz, managing partner, Brouse McDowell LPA

Jeff Heintz isn’t bragging when he says the legal firm where he is managing partner, Brouse McDowell LPA, made it through the recent recession without missing a beat ― it’s a matter of fact that the firm only had a few scratches.

“We did OK because we stuck to what we did best; I think our reputation served us well,” he says.

Once Heintz realized that the 92-year-old company’s brand was the best weapon in his arsenal to fight the recession, he instilled a way of thinking to bolster that premise for the 120 employees.

“We adopted the philosophy that we are going to control the kinds of things we can control,” he says.

The first premise pertains to the quality of work, an obvious aspect that can be controlled.

“If you work hard, and you have high character, and you behave in a manner that is befitting of things like ‘A Lawyer’s Creed’ and ‘A Lawyer’s Aspirational Ideals,’ good things are going to happen to you,” Heintz says.

“If you develop skills that enable you to help your client as a technician and develop the feelings that enable you to discern how best to direct your client, whether or not a particular strategy has short-term or long-term benefit, then you can become a trusted adviser,” he says.

“There’s no better feeling in the world than being a trusted adviser, somebody who works hard, develops a business and builds it into something grand, and it is the centerpiece of that person’s life and perhaps that person’s family,” he says.

Place a high premium on community involvement, and feel an obligation to give back to the extent you can by participating and furthering the efforts of nonprofits and volunteering because it is the right thing to do.

“It also gives your people an outlet other than just coming in and putting on their miner’s helmet and cracking away at work. It keeps them fresh, focused and gives them some perspective.”

Dedication to clients can also be controlled.

“We’ve had relationships with clients that go back decades,” he says. “We’ve been through tough times with clients and we’ve been there for them. This time it was tough times for everybody.”

With a relationship that has developed trust and understanding over the years, there are often mutual benefits.

“You and your clients benefit from the strength and depth of your relationships because businesses across the board were facing issues that they never faced before, having to consider choices that they never considered before, and I think it is a considerable comfort to them to know that when they would pick up the phone to call their advisers, it’s a number that they have been calling for 30 or 40 years.”

One of the tools that may serve you in being open with clients is what Heintz calls the “sneaky direct approach.”

“You just sit down with them, and you tell them the truth,” he says. “You let them know even if you can’t lay out for them chapter and verse what will happen, you lay down for them as best you can your belief about what will happen and what steps you are taking to control what can happen. I think people tend to react well to that.”

Another factor to control is the seriousness with which responsibilities are taken.

“Take that commitment of trust very, very seriously,” Heintz says. “One of your first thoughts should be how is this going to benefit your client ― not how much money can you make, not how quickly can you get this job done, not how much personal goodwill can you get from this.”

As a final matter, protect yourself as best as you can against the things you can’t control.

“Ignore a lot of the chatter for things that happen at the federal level ― the preoccupation with the recent Washington gridlock, for example ― as difficult as it is,” Heintz says.

How to reach: Brouse McDowell LPA, (330) 535-5711 or www.brouse.com

Availability is king

It’s been said that no matter recession or economic growth, your ability to succeed in business is only limited by your availability to your customers.

Jeff Heintz, managing partner of Brouse McDowell LPA, believes in that. In fact, he has his home phone number on his business card.

“If you make your clients know that you are available to them pretty much 24/7, they appreciate the commitment and are very conscientious how they use it,” he says.

Likewise, cascade that premise of availability throughout your staff, from top to bottom.

“If you are accessible, that’s a talisman of your commitment to your clients,” Heintz says.

“Don’t tell them, ‘You need to get a hold of me between 9 a.m. and 5 p.m. on Monday through Friday because I’m not going to look at my mail over the weekend, and I’m not going to answer my phone.’

“Not everything’s an emergency, and there are people out there that live their lives at general quarters ― and everything’s an emergency ―but there are emergencies out there, particularly as we increasingly get to a global economy where it may be 7 p.m. on Friday night in Akron, Ohio, but 9 a.m. elsewhere on the globe where people are at work when you are at play. But most people use their best judgment, and they have the ability to discern between what’s an emergency and what’s not.”

How to reach: Brouse McDowell LPA, (330) 535-5711 or www.brouse.com

Phil Derrow invested during the recession to set Ohio Transmission Corp. up for growth

Phil Derrow, President and CEO, Ohio Transmission Corp.

Phil Derrow had been kicking around the idea of investing in the future of his company, Ohio Transmission Corp., for some time. One way or another, he was going to do it, but the question was this: Should he spend the cash when business was so bad during the bottom of the recession or wait?

With several locations outside of the state, it was simple to see that it was time to drop the “Ohio” tag from Ohio Transmission and Pump Co., a division of the corporation, because it was becoming more of an issue as the company grew.

“It wasn’t that much of an issue; we were able to deal with it, but when you’re down in Kentucky, they want to work with Kentucky people, not Ohio people,” says Derrow, president and CEO. The situation was the same in West Virginia. “You know, people have a sense of place; they have a sense of their own community, and being an outsider is never a positive thing.”

Not only that but the types of products offered and the focus of the business had changed since 1963 when it was founded by Derrow’s father, David Derrow. Also, the website needed a major makeover.

The second division, Air Technologies, also needed some investments along the lines of staff and production facilities.

Deciding if the projects, which would include rebranding and capital improvements, were worth the money during a recession hinged on a feeling that the recession had bottomed out ― and a belief in the future. The moves put the company back on the growth track.

Five years ago, the corporation had 290 employees and annual revenue of $100 million. Now, it has 360 employees across seven states, and 2010 revenue was $116.5 million.

The new website brought results almost immediately. More traffic was seen on the first day than what was seen in the previous six months. The switch to the name OTP Industrial Solutions brought all positive reactions.

Here’s how Derrow used belief in a better future to take action and grow the company.

Have confidence and believe

Change is said to be the only constant thing in life. When business is going really well, it’s easy to forget the fundamentals, such as that the economy will change at some point. Derrow believed that rather than pull back, he would opt for change.

Derrow was considering ideas for both divisions. Ohio Transmission and Pump Co. needed to be rebranded; Air Technologies needed to expand to fill the growing demand for industrial air compressors. The only question was, “Why spend money now when things are so challenging?”

The recession was tightening its grip on the company. With nearly 15 years under his belt as CEO, Derrow had been following good business practices. They put the part employee-owned company in a position to hopefully weather the storm. The company was not overleveraged and it didn’t get too far out on a credit limb with customers. In addition, it had employment practices that had some self-adjusting mechanisms, for instance, a compensation structure that was somewhat self-correcting, linking company financial health to wages.

“Business was down quite a bit, and our sales teams and managers were trying to figure out how to maximize business as much as we could,” Derrow says. “We decided not to conduct layoffs, we had plenty of people, and it was a decision to go ahead and do this now because we believe in the future, we know recessions end, we have the fat, let’s go ahead and make this investment.”

He saw some indications that the recession had bottomed out, and while he doesn’t quite call it a hunch, he felt it was time to take action.

“If you believe and know recessions always end, then there is frankly no better time to invest in the end of the recession than during the recession,” Derrow says.

Prices for labor and material are likely to be bargains, and through investment, you may be able to increase your market share even though the market is contracting.

“Continuously invest in yourselves and your company,” he says. “I make a big deal about the fact that investment is a continuous and ongoing process, and it is an essential statement of a belief in the future. If you believe based on knowledge that recessions always end, then you continue to invest. It’s no more complicated than that.”

You have to have the confidence to know that recessions end and act accordingly. If you don’t believe things are going to get better, and you aren’t prepared to act accordingly ― act in ways that they will get better ― then it is difficult to take advantage of the opportunity.

The reality is the United States economy follows a cycle, although expansions and recessions cannot be pinpointed ahead of time. Recessions happen about every five to seven years ― the National Bureau of Economic Research notes recent recessions happened in 2007, 2001, 1990, 1980, 1973, 1970, 1960, 1957, 1953, 1949 and 1945.

“There will be another recession,” Derrow says. “There will be another recovery. And so on and so forth. Even as each one is different, there are enough similarities in actions to take before, during and after that it isn’t impossible to make a plan.”

Energize employees

Darrow’s strategy was to rebrand Ohio Transmission and Pump Co. into OTP Industrial Solutions, with a new logo and website, and to invest in employees and a new factory for Air Technologies. With those as objectives, he set out to energize the troops.

“Actually, I would say if there were any concerns, it was over not doing it,” he says. “In most of our markets outside of Ohio, we were downplaying the Ohio element of it anyway. We were going to market as OTP rather than Ohio Transmission and Pump. So there wasn’t much of any resistance. But to the extent that there was any, it was, ‘Well, gee, this isn’t free. Why should we spend money now when things are so challenging?’

“That is where leadership is so important to demonstrate to people by action that your core values actually mean something,” Derrow says.

He found it more important than ever to reinforce the company’s core values of integrity, achievement, balance and, especially, investment. By showing that a core value (investment) was being shored up with the decision to spend during a recession, it elicits trust and confidence from employees.

Derrow took advantage of the culture of collaboration that had been built at Ohio Transmission Corp. to get the employees engaged in the investment “fever.”

“We talk about everything,” he says. “Involve your management, executive management, local management, sales people and staff people. We talked about the entire process, what the name was going to be, what the logo was going to look like, we talked about all of it.”

Cultural collaboration eliminates a sole deciding figure. Accordingly, decisions are those of a team.

“There isn’t one person who gets to say, ‘We’re doing this,’” Derrow says. “Even in my position as chief executive, one would think that I can, and maybe even should, simply say, ‘We’re doing this and everybody has to follow along.’

“I may have a good idea, and I certainly do have responsibility to set primary strategic goals, but even that is a process of talking to your folks, listening to your folks, listening to what your customers say and in making decisions that are collaborative no matter what your role is.”

If you don’t have a culture of collaboration, bring in outside resources that have the talent or skills you need.

“It is still then a matter of what you want to do as a company, where are you trying to go, and what is your objective,” Derrow says. “Ultimately, you end up collaborating. You have a culture of collaboration of some sort whether you like it or not, even if you are bringing in outsiders. It’s a collaborative process for you to tell the outside entity, the consultant, what it is you are trying to accomplish and you work together to get the outcome.”

You have talented people who built your success and are best positioned to make decisions about where you’re going next, and you can bring in outsiders to help you go where you want to go rather than tell you where that ought to be.

“An interesting part of this is I was not involved much at all in the details of the rebranding process and the website design,” Derrow says. “That was something mostly our team did. My role was to say yes to the investment, and I do care about the design looked like, so I had input what the logo was and color scheme and such for the website, but other than that, our team and our service providers ― they made all the decisions.”

A new logo was designed for OTP Industrial Solutions, along with a new, interactive website.

Meanwhile, Air Technologies received a large investment in not only a new factory, but in a decision to keep all employees on the payroll and even add some sales representatives.

“We were not sure that we would be able to regain profitability during the recession, because it was a deep one,” Derrow says. “Yet we believed that our people are the ones who are responsible for our success and that when times get tough, it’s not our way to just toss people overboard.”

The decision to invest in production facilities was made before business had fully recovered. The company’s Direct Air product, which is compressed air as a utility much like natural gas, has been a fast-growing business for Air Technologies. The new factory went online last year.

“Those (the staff and the factory) were significant investment decisions when business was still pretty bad,” he says.

Don’t forget the human factor

Even though the strategies were accepted and the rebranding and expansion projects were going ahead, Derrow still had to contend with managing during a recession.

“Our sales volume dropped very rapidly and that’s always one of those things that comes as a surprise, and is not a particularly positive surprise,” he says. “So I guess for us, and this really gets back to the notion that each company is unique, each company’s culture is unique, the attitudes and objectives of the owners and leaders of each company are unique, so there isn’t one right answer on how to manage through a recession.”

For Derrow’s company, it was a matter of collaborating with the people and talking openly with the teams.

“We have 360 people now, and you can’t manage through such a challenging period without engaging the people in the organization,” he says. “We believe in being open and honest with our people and telling them what’s going on, telling them the company’s position, telling them our strategy and making them part of the process from start to finish.”

Within a small group of options, communication methods are fairly standard. What Derrow found important was that the more effective you want your message to be received, the more methods you should use.

“Have meetings, send out e-mails to folks, to all of your associates, share what’s going on and what you are doing on an ongoing basis through multiple means,” he says. “Have corporate-level meetings and all-associates type e-mails, local meetings and one-on-one conversations with people. People get nervous. People have families to take care of. They have their own mortgages to pay.

“There are individuals who work for you who have their own lives and so during a tense period, you have to be receptive to the fact that there are real individual human beings involved,” he says. “So you could have global e-mails and meetings, but at the end of the day, you have to be one-on-one with people and listen to their fears and concerns and show them the way forward.”

The good thing is that your managers are people, too ― they have their own fears. They carry it out in the same way that the executive team carries it out with them.

“So if you start there, and make it clear that you expect that the kind of conversations you’re having with the executive team the executive leaders are having with their managers, expect their managers to have those very same kinds of conversations with the people on their teams all the way to the line-level people that work there.”

How to reach:Ohio Transmission Corp., (614) 342-6123 or www.otpnet.com

The Derrow File

Phil Derrow, President and CEO, Ohio Transmission Corp.

Birthplace: New York City. But I was only there for three days, or for however long they kept my mother and me in the hospital. My family lived in New Jersey at the time, and the hospital was in New York. I’m from Columbus. My family moved there when I was 3.

Education: I am a graduate of The Ohio State University. I was a marketing major. I suppose you could say I minored in engineering, but my degree did not say engineering. I took mechanical engineering classes and then moved to the business school and got a marketing degree.

What was your first job?

My very first job out of college was with a local car dealer, selling cars. That particular profession has a lot of negative things associated with it, and the reality is I worked for a good guy, and I learned how to sell. I learned that the best way to sell is to listen to customers and let them sell themselves. It was a straight commission job, and if I wasn’t any good at it, I didn’t make any money. No draw. I would say there were some valuable lessons and there were also some valuable lessons about how to manage differently, shall we say. I didn’t want to manage others the way I was. I was there six months.

What was the best business advice you ever received?

The best business advice came from watching my father who was the founder of the company along with a partner. So this kind of takes the form of a story. Leadership and management are always about others. It isn’t about you. So that’s how I would phrase the best business advice. And the story is, I think I was about 8, and I wanted something as most 8-year-olds do, and my father said no. I said, ‘How come?’ and he said, ‘Because we can’t afford it.’ I said, ‘Why not? You’re the boss; why don’t you just take more money?’ His response was something along the lines of, ‘There are other people who work for the company, and if I just take more for me, then I’m not treating them with the respect that they deserve. They’re the ones who are helping to build the company along with me.’ So it was one of those lessons that said it isn’t all about you. It’s about others.

What’s your definition of success?

Getting back to the best advice ― it isn’t about you, it’s about others ― my definition of success would be defined as creating a workplace where others can be successful together and create a thriving and successful business.

Jeff Heintz led Brouse McDowell through the recession

Jeff Heintz, managing partner, Brouse McDowell LPA

Jeff Heintz isn’t bragging when he says the legal firm where he is managing partner, Brouse McDowell LPA, made it through the recent recession without missing a beat ― it’s a matter of fact that the firm only had a few scratches.

“We did OK because we stuck to what we did best; I think our reputation served us well,” he says.

Once Heintz realized that the 92-year-old company’s brand was the best weapon in his arsenal to fight the recession, he instilled a way of thinking to bolster that premise for the 120 employees.

“We adopted the philosophy that we are going to control the kinds of things we can control,” he says.

The first premise pertains to the quality of work, an obvious aspect that can be controlled.

“If you work hard, and you have high character, and you behave in a manner that is befitting of things like ‘A Lawyer’s Creed’ and ‘A Lawyer’s Aspirational Ideals,’ good things are going to happen to you,” Heintz says.

“If you develop skills that enable you to help your client as a technician and develop the feelings that enable you to discern how best to direct your client, whether or not a particular strategy has short-term or long-term benefit, then you can become a trusted adviser,” he says.

“There’s no better feeling in the world than being a trusted adviser, somebody who works hard, develops a business and builds it into something grand, and it is the centerpiece of that person’s life and perhaps that person’s family,” he says.

Place a high premium on community involvement, and feel an obligation to give back to the extent you can by participating and furthering the efforts of nonprofits and volunteering because it is the right thing to do.

“It also gives your people an outlet other than just coming in and putting on their miner’s helmet and cracking away at work. It keeps them fresh, focused and gives them some perspective.”

Dedication to clients can also be controlled.

“We’ve had relationships with clients that go back decades,” he says. “We’ve been through tough times with clients and we’ve been there for them. This time it was tough times for everybody.”

With a relationship that has developed trust and understanding over the years, there are often mutual benefits.

“You and your clients benefit from the strength and depth of your relationships because businesses across the board were facing issues that they never faced before, having to consider choices that they never considered before, and I think it is a considerable comfort to them to know that when they would pick up the phone to call their advisers, it’s a number that they have been calling for 30 or 40 years.”

One of the tools that may serve you in being open with clients is what Heintz calls the “sneaky direct approach.”

“You just sit down with them, and you tell them the truth,” he says. “You let them know even if you can’t lay out for them chapter and verse what will happen, you lay down for them as best you can your belief about what will happen and what steps you are taking to control what can happen. I think people tend to react well to that.”

Another factor to control is the seriousness with which responsibilities are taken.

“Take that commitment of trust very, very seriously,” Heintz says. “One of your first thoughts should be how is this going to benefit your client ― not how much money can you make, not how quickly can you get this job done, not how much personal goodwill can you get from this.”

As a final matter, protect yourself as best as you can against the things you can’t control.

“Ignore a lot of the chatter for things that happen at the federal level ― the preoccupation with the recent Washington gridlock, for example ― as difficult as it is,” Heintz says.

How to reach: Brouse McDowell LPA, (330) 535-5711 or www.brouse.com

Availability is king

It’s been said that no matter recession or economic growth, your ability to succeed in business is only limited by your availability to your customers.

Jeff Heintz, managing partner of Brouse McDowell LPA, believes in that. In fact, he has his home phone number on his business card.

“If you make your clients know that you are available to them pretty much 24/7, they appreciate the commitment and are very conscientious how they use it,” he says.

Likewise, cascade that premise of availability throughout your staff, from top to bottom.

“If you are accessible, that’s a talisman of your commitment to your clients,” Heintz says.

“Don’t tell them, ‘You need to get a hold of me between 9 a.m. and 5 p.m. on Monday through Friday because I’m not going to look at my mail over the weekend, and I’m not going to answer my phone.’

“Not everything’s an emergency, and there are people out there that live their lives at general quarters ― and everything’s an emergency ―but there are emergencies out there, particularly as we increasingly get to a global economy where it may be 7 p.m. on Friday night in Akron, Ohio, but 9 a.m. elsewhere on the globe where people are at work when you are at play. But most people use their best judgment, and they have the ability to discern between what’s an emergency and what’s not.”

How to reach: Brouse McDowell LPA, (330) 535-5711 or www.brouse.com

Whirlpool takes axe to outlook, jobs following Electrolux’s lead

BENTON HARBOR, Mich. ―  Whirlpool Corp., the world’s largest maker of household appliances, is responding to “recessionary” demand in major developed markets by cutting jobs and manufacturing capacity, following a similar move by rival AB Electrolux.

Whirlpool will cut more than 5,000 positions, about a tenth of its workforce in North America and Europe, close a plant in Arkansas, and reduce its overall manufacturing capacity by about 6 million units.

The maker of Maytag and KitchenAid appliances, which slashed its annual profit forecast and reported weak quarterly results, has been hurt by high material costs and by shoppers cutting back on big-ticket buys such as washing machines and dishwashers.

“Given the weakening global economic environment, we are today announcing aggressive plans that will result in substantial cost and capacity reductions,” Chief Executive Jeff Fettig said in a statement.

Earlier, Electrolux, the world’s No.2 appliance maker, said it would seek further cost cuts after forecasting that key markets would see declining demand this year.

Whirlpool, which employs 71,000 staff globally, expects industry demand in North America to fall more than it previously estimated, and it predicted no growth in shipments in Europe, the Middle East and Africa this year.

July-September adjusted profit was $2.35 a share, below the average analyst forecast for $2.68 a share, according to Thomson Reuters I/B/E/S.

“Our results were negatively impacted by recessionary demand levels in developed countries, a slowdown in emerging markets and high levels of inflation in material costs,” Fettig said.

Whirlpool now expects full-year profit of $4.75-$5.25 per share, down from its previous estimate at the low-end of $7.25-$8.25 a share.

The company will take a restructuring charge of about $500 million from the next quarter through 2013 related to the cost-cutting moves, which will remove $400 million from annual costs by end-2013.

Whirlpool shares were signaled down around 15 percent in pre-market trade, after closing at an 8-week high of $60.47 in New York on Thursday.

U.S. facing slow growth, not slipping back into recession, CEOs say

COLUMBUS, Ohio ― The economy is not slipping back into recession, but will face a long, slow recovery as political gridlock in Washington and Europe make businesses nervous about investing, U.S. corporate leaders said.

That was the word from General Electric Co. Chief Executive Jeff Immelt and FedEx Corp. CEO Fred Smith at an event in Columbus, Ohio, on Thursday.

“Recovery is under way, but it’s a long, slow recovery. Slower than we’d like,” Immelt told a group of about 500 executives from midsized U.S. companies.

FedEx’s Smith offered a similar outlook.

“We don’t see a contraction; we don’t see a recession,” the founder of the No. 2 package-delivery company said. “It’s steady as you go, slow growth.”

ExxonMobil Corp. CEO Rex Tillerson sounded a similar note in Washington.

“I am not as optimistic as I was six months ago. It will continue, I am afraid, to be a sluggish (U.S.) economy, and globally the economy will not perform as well as we expected,” Tillerson told the Washington Ideas Forum.

“We will have positive growth (but) it is not going to be as positive as we hoped.”

Their measured confidence comes at a time when the U.S. economy is highly fragile, spooking investors and contributing to the nearly 10 percent decline in broad Standard & Poor’s 500 index .SPX since the start of the year.

Their remarks came at an event where GE Capital and Ohio State University Fisher College of Business unveiled research on the “middle market” sector of U.S. business, companies with between $10 million and $1 billion in annual revenue.

The study found that tier of business is an underappreciated jobs engine for the U.S. economy, accounting for about one-third of employment and continuing to add workers through the recession, while big U.S. companies were shedding people.

How Chad Hallock got creative about driving business at Budget Blinds during the recession

Chad Hallock

Chad Hallock, co-founder and CEO, Budget Blinds Inc.

On the surface, Chad Hallock’s situation seemed contradictory: generate more business while spending less money.

Hallock, the CEO and one of five co-founders of Budget Blinds Inc., was forced between this rock and a hard place by — not surprisingly — the economic recession. As a manufacturer and installer of custom blinds, shades and drapery, Budget Blinds’ customer base took a hit as the economy took a nosedive in late 2008, slashing new housing starts and halting remodeling projects in the process.

That made it much harder for the company’s 800 franchises — employing about 2,000 people — to drive business and turn a profit. Up until the recession hit, the company had been growing by about 100 franchises a year, with a failure rate of approximately 3 percent. Once the economy began its freefall, Budget Blinds was opening 60 franchises a year with a 10 percent failure rate.

“The challenge was to keep our franchisees in business and thriving in spite of the situation,” Hallock says. “When things are great, you can get very little in the way of new business and still be successful. When the housing market goes, so does the lead flow they were accustomed to.”

Hallock and his leadership team had to re-evaluate how they were marketing the business, where they were spending money and how they were going about beating the bushes for new potential customers. With the economy crumbling throughout the end of 2008 and into 2009, Hallock and his team came to the conclusion that large, high-cost marketing campaigns paved a path to the poorhouse.

“You really have to take a look at how you’re generating those leads,” he says. “You can do things like a mailer, a magazine ad or a television ad. But those cost money. So we quickly realized we had to plug this hole another way, and that’s when I said we had to focus on the Internet.”

Over the next several years, Hallock and his team structured and rolled out a two-pronged plan: Get to the top of the main search engines without spending money on sponsored links and provide franchisees with support for their grassroots sales efforts, tactics intended to build up the customer base through personal relationships.

Don’t make them scroll

As a company with no storefront locations, Budget Blinds is completely reliant on networking and mass marketing to find new customers. By reducing the company’s emphasis on print advertising and moving toward the Internet, Hallock made it a necessity to get Budget Blinds to the top of all relevant Web searches, which meant he needed to partner with people in the growing marketing area of search engine optimization, or SEO.

Hallock had used the Internet as one tool in his marketing belt for about a decade, but now he needed it to become one of his main sales-driving vehicles.

“Over the past six or seven years, the Internet has given us the best bang for our buck,” Hallock says. “It’s called CPL, or cost per lead. Once you see that the Internet is helping to drive a certain amount of business, how can I improve that? How can I spend my money and time on things that I can improve?”

At the top of most Internet searches, the user will find a set of sponsored links. Those links are paid advertisements. The company pays a fee to get their link at the top of the page. Hallock wanted keywords and key phrases to do the pulling to the top of the search, not the marketing funds he was feverishly trying to conserve. But he was wading into the deep end of the SEO pool with e-commerce companies that are specifically designed to market and sell on an Internet-based business platform.

Though Budget Blinds markets over the Web and does not have a brick-and-mortar retail presence, the company isn’t designed to be an e-commerce outfit.

Hallock went to his Internet marketing agencies, which he has been working with for about a decade and began to map out a plan that would allow Budget Blinds to venture into the fray with e-commerce companies.

“We had a bunch of meetings, all the agencies getting together in our conference rooms and talking about the challenge,” Hallock says. “Just because they’re e-commerce doesn’t mean we can allow them to show up and place higher on the searches than we are. Before we solved that problem, several years ago, we weren’t showing up well at all on the free part of the searches. Now that we have worked together to address the challenge and solved it, according to recent searches, we’re the second-highest company in terms of SEO in our space. The company ahead of us is an e-commerce company, and they’re one of our key accounts.”

The key to mastering SEO, Hallock says, is to learn how large search engines such as Google, Yahoo and Bing work. The big search engines know who is searching for what. Once you have uncovered who is searching for your product or service, when they’ll search for it and how often, you can build a strategy that can help maximize your Internet visibility.

“We can go to Google and find out, for example, how many people tomorrow are going to search the term ‘blinds,’” Hallock says. “How many are going to search for ‘window company’ and ‘window treatments.’ Google has the ability, with the way they built their system, to see what type of searching is going on. There is kind of a fundamental math equation that says if all these searches are going on and I’m in the one through three position on the search results, I’m going to get X amount of traffic. And if I can convert on that X amount, it will generate a given amount of revenue. You put a profit percentage to it, and you decide what it’s worth to go after. How many resources and dollars should I spend if this is the potential outcome?”

If you’re going to make a large commitment to SEO and Internet marketing, one place you will need to spend money and resources is with your personnel. Despite a shrinking revenue base over the previous several years, Hallock has still invested money in beefing up his IT team.

“Over the past three years, our IT team has grown to 22 people,” he says. “We’re not an e-commerce company, but we have grown our IT team and we have specific, exclusive agencies that handle our Internet, because of the level of commitment we’ve made. I am in meetings constantly, all focused on how we can improve our Web presence, how can we improve the lead flow.”

Lead the way

The Internet is a useful tool for marketing, but you can’t lean entirely on Web searches if your company isn’t structured strictly for e-commerce. You still need a personal touch, and that means putting power in the hands of the employees who develop relationships with your customers, and that’s where the second prong of Hallock’s strategy comes in.

You have to educate employees and back up their training with resources. At Budget Blinds, Hallock and his leadership team have worked for the past several years to give franchisees a ready-made jump-start in driving new business.

From the corporate office in Orange County, Hallock and his team have spent the past several years negotiating partnerships with major homebuilders around the country. The partnerships allow Budget Blinds to attain status as the exclusive provider for window shades and treatments in new homes.

“We’re working with a number of huge companies now, doing tests to see of they’ll be able to add us as one of their suppliers,” Hallock says. “With those kinds of deals in place, our franchisees don’t have to go out and generate leads. They automatically get a book of business when they start out with the Budget Blinds brand.”

If you’re going to ask a lot of your workers in the field, you have to provide them with a lot of support. You have to lay the groundwork before your people can excel. Hallock used his franchise system as an example of how to support employees in the field.

“The struggle with being a franchisee as the economy backslides is, I’m the franchisor and I’m asking, ‘What have you done for me lately?’” Hallock says. “But if you can start giving your people, the day they move into their franchise territory, some great opportunities, you’ll put them in a much better position for success.

“If, for instance, a franchisee knows that the brand is going to have a presence in all the big box retailers in their territory, that’s a big deal when you consider all the customer traffic that the different big box stores get. If you can negotiate deals to get into those stores, then when a franchisee signs on with you, they know they’re going to get all of that big box store’s traffic. They’re going to have a display in those stores.”

As a corporate leader, your job isn’t on the grassroots level. Your job is to hire the right work force to conduct operations in the field, and then leverage your resources to make them better at their jobs. Hallock has fully embraced the notion that he and his leadership team are the main support staff for the company’s franchisees.

“The franchisees are on the grassroots level,” he says. “They’re the ones we’re teaching to go knock on doors, go to meetings, do all the networking. That’s not corporate’s role. We have all the contacts, we meet with the vice presidents of the departments and work with them on a much higher level than grassroots.”

You need to maintain a global perspective on your business because you need to develop an accurate picture of how to best utilize your resources. Some employees, divisions and regions in the field will bear more fruit than others, for a variety of reasons. Hallock says that when you’re deciding where to distribute your corporate-level resources, it’s often best to aim toward the middle of the pack — toward the areas that are performing adequately, but could do much better. That is where the potential is often the greatest.

“Don’t always focus on the worst performers,” Hallock says. “I’ve seen people who want to focus all their time and energy on the worst part of their business, and you’re going to spend all of your resources and effort on trying to help them to be successful, and it won’t work. Instead, focus on where you think you can get the biggest return.

“The people in the middle, they’re responsive. They react when you give them sales tips, when you help them. You want to go where people will make a change, and the help you give them will put them over the top to where they’ll become more successful than they ever thought possible.”

Hallock’s multifaceted approach to driving new business has allowed Budget Blinds to weather the recession in relatively good shape. The company has remained in growth mode with a long-term goal of 1,500 franchisees. Budget Blinds generated $240 million in revenue last year.

“Just remember, don’t put your eggs in one basket,” Hallock says. “As you grow, probably eight out of 10 things won’t work the first time, but the two that do work make up for the eight that don’t. If you try only one thing at a time, when that one thing doesn’t work, you’re six months behind the eight ball again. You’re in an even worse position. That’s why you need to have that multifaceted approach.”

How to reach: Budget Blinds Inc., (714) 637-2100 or www.budgetblinds.com

The Hallock file

Name: Chad Hallock

Title: Co-founder and CEO

Company: Budget Blinds Inc.

What is the best business lesson you’ve learned?

Never let the failures get you down, because success always seems to be right around the corner. I can’t tell you how many times that happened. I work on things all the time that don’t work. But if I quit, I’ll never find the one thing that does work. When you’re hearing ‘no,’ you never know how close you are to a ‘yes.’

What traits or skills are essential for a business leader?

If you ask me, transparency is the one word I’ll come back to. They have to see your heart, your integrity, and your ability to take the bad with the good.

What is your definition of success?

Freedom. When I hit 1,500 franchises, and the franchisees are successful, I’ll have hit every goal I’ve wanted to achieve. That is what everyone bought into. And with that comes freedom. Freedom from worry over what is going to happen today.

How Millard Choate successfully led Choate Construction through the downturn

Millard Choate, founder and president, Choate Construction Co.

When Millard Choate was an 8-year-old growing up on a cattle farm outside of Nashville, he and his dad built their family’s home. As he continued to grow, the family developed two cattle farms and built barns and facilities, as well. So from an early age, he knew he wanted to be a construction superintendent because of how much he enjoyed seeing things built.

In 1989, that dream was realized when he started his own company, Choate Construction Co. But the economic landscape at that time was challenging, so he had to really dig in to make the company succeed. As the child of Depression-era parents, frugality and positive outlook had been built deep down inside him at a young age as physical buildings were built up tall around him. These characteristics helped him establish his firm and ultimately grow his business despite the tough times.

So when the most recent recession hit, it may have sent shockwaves through many organizations and forced a lot of them to completely revamp their game plan, but Choate simply relied on his upbringing and experience and was able to take it in stride.

“What we have now is reminiscent of when I started the company in ’89,” the president says. “These times are kind of tempering and testing times, and it’s taken us back to our roots to focus on aggressiveness, focus on searching out all types of different projects, focusing on the core values of the company, which includes our procedures.

“Blocking and tackling is a big focus.”

Additionally, he relied on his upbringing and initial experiences founding the company to help him through.

“It’s a tough time,” Choate says. “It’s like people who went through the Great Depression. It can be tough, but it gives people an opportunity to improve, to sharpen both our individual skills and company skills. These times, due to the declining revenues and fees, force us companies to become more efficient. It promotes efficiency and frugality on a company basis as well as on an individual basis — it inspires people to improve themselves and become more and more of an indispensible component of the firm.”

Taking this approach has helped the company weather the storm when revenue dropped from a peak of $738.9 million in 2007 to $358.6 million in 2009.

“[It’s] just thinking and planning and focusing — focus on your core competencies and what you do best and also leveraging those competencies and the types of projects you’ve done,” Choate says. “I believe that’s really the key to it and just keeping the faith. An old coach one time said, ‘When you’re up against a massive team — I was a lineman — just keep your legs moving and keep your legs turning.’ That was true then and in business today. Just keep on plugging and keep on going. Don’t give up.”

That’s exactly what Choate has done. As a result, revenue climbed last year to $429.8 million. The company also has no debt and is focused on the future.

“We feel very confident,” he says. “Our backlog is higher than it’s been in two years, so we see glimmers of improvement, and we see a few more opportunities picking up, and we get a lot because of our reputation. … I feel positive. Reputation is everything, and that’s what keeps us going, so I feel positive in that regard.”

Here are the principles that Choate used to help him not give up.

Meet client needs

Scrounge. It’s often a negative word, but Choate doesn’t see it as such.

“Beat the bushes. No project too large, no project too small,” he says.

In other words, he’ll chase all sorts of projects instead of limiting himself to just a few types, and he’ll do whatever his client needs. It’s a tough market, and the competition is struggling and making things difficult for him.

“What we struggle with as a contractor is we will, at times, have to compete with firms that are really in tough shape that will price warp at a loss just to generate cash flow,” he says. “We can’t do anything about that. We just have to demonstrate that we have the right numbers.”

Not having any debt also helps assure clients that Choate is a good company to do business with.

“There are firms that are really on the ropes and some clients have concerns — will they be around?” Choate says. “Both clients and subcontractors are very nervous because typically the money flows through the general contractors to the subcontractors, and both the subcontractors and the owners are nervous that the contractor could go defunct and the money would have to be paid twice by the owner or the subcontractor doesn’t get paid. That confidence is a key in all parties.”

In addition to establishing the firm as one that can be trusted, he says he also makes sure to respond when customers — or anyone for that matter — calls.

“Anytime they should communicate or call or whatever, instant response is key,” he says. “They can rely on that. Just doing a great job and making sure that they have the confidence that we are protecting their interests at all times; I preach that over and over to our people. Clients trust us to spend millions of their dollars wisely. That’s a trust that we have to maintain.”

To better do that, you have to know what’s important for your customers.

“You have to understand what your client’s hot buttons are, what his interests are,” Choate says. “It’s not just always revenues. Each client has his own nuances so just customize your approach to that client and make sure you’re taking care of them and promote that you’re looking out for their best interest.

“You talk to them. You sit down with them at the inception of the relationship of the project.”

He has an expectations meeting to talk about what they want to see and includes all the key stakeholders — the architect, engineers and anyone else pertinent to the project — and he’s found clients are very positive and forthcoming in those meetings.

“Sit in a room and just go around the table and say, ‘What do you expect out of this job?’” he says. “Then, ‘What are your hot buttons, and what really bothers you in previous projects?’ You’d be amazed what comes out of that — just communicating and actually talking.”

He also says that not every CEO has to personally be involved with that level of intimacy with the client, because it’s just not feasible, especially the larger your organization grows.

“We have different groups here, but the division manager of that group, I expect to have a personal relationship with every client,” he says. “It boils down to that type of relationship.”

Focus on the positive

Years ago, when Choate’s computer would boot up, a short message used to pop up right before the system started — “Get pumped up!”

“Being enthused and going at it tooth and nail is good advice,” he says. “Going at things with a lot of enthusiasm and energy helps dispel gloom and doom anyway.”

He tries to keep employees motivated in the middle of all the negativity they see in the industry. One way he does that is by updating them on how projects are going. He shows photos and announces any new awards, which gets people excited and instills confidence in them. He also expects his managers to be positive, as well. For example, if the Choate Interior Construction group gets a project, the manager of that arm of the business will get on the intercom and just say one thing — “Wahoo!”

“That’s all he says,” Choate says. “Over time, people know what that means. That’s positive.”

He also tries to recognize people’s individual accomplishments, so if someone becomes LEED certified, he recognizes that person. He also recognizes people for accomplishments in their personal lives when he hears about them. For example, one employee received a national award from the Cystic Fibrosis Foundation, so he called that employee out for the accomplishment in front of everyone.

“It’s not only positive, but it’s two birds with one stone — it lets people know their individual efforts are recognized,” he says.

Choate understands that being positive isn’t the natural reaction for many, and he knows that you can’t control everything in business, but the one thing you can control is the way you look at what’s going on.

“Be thankful,” he says. “Realize what blessings you’ve got. Look at your blessings and appreciate the positive side.”

For example, while his volume may be down significantly, he knows that his business is still much larger than it was 10 years ago, so that gives him something to be thankful for in spite of the tough times. By taking a more positive and thankful outlook like this, it sends a positive message to employees so they can stay more upbeat and sets an example for them, as well.

“It’s good to realize that everything you have is a gift from God, and that’s who you really ought to give credit to in the first place,” he says. “That would help set the stage very quickly.”

Look at data

While Choate maintains a positive outlook in life and in business, another key to success through the recession has been not taking a Pollyanna outlook. You have to balance that positivity with being realistic or people won’t think you understand the situation.

“The other thing is being a realist,” Choate says. “I’ve recognized cycles for many years. The curve can’t always be on an upward trend. The growth rate absolutely can’t continue that unsustained climb. It has to, in some cases, decline. It’s a fact of life.”

By degree, Choate is an economist, so looking at data comes naturally to him, but often it’s something leaders tend to neglect.

“I encourage people to analyze the markets,” he says. “What are the coming trends? What are the needs going to be, not just today but six months to a year from now? Try to anticipate where to deploy your resources to produce the maximum return.”

For example, he says that most people recognize that government work and health care are bright spots right now, and condominiums are a more diminished market. Seeing that, he wouldn’t deploy resources to building condos but would focus on those other areas that will be growing and providing opportunities.

Choate saw his volumes increase every year of his business until two years ago, but because of the realistic outlook he had, it didn’t crush him when they declined. It may have been frustrating, yes, but devastating, no.

“It’s almost like the seasons of the year,” he says. “You may wish it was summer all year long, but you just accept the fact that you have fall and winter, but you have faith it will come back next year.”

How to reach: Choate Construction Co., (678) 892-1200 or www.choateco.com

Millard Choate, founder and president, Choate Construction Co.

Born: Nashville

Education: Vanderbilt — bachelor’s degree in economics and business with a minor in engineering

What was your first job?

I could go way back. I moved a pile of bricks for a neighbor when I was 5 years old. It took about two weeks, and I got 25 cents for that. My first real job was making concrete pottery and birdbaths and benches for a little company in Nashville, and I worked 40 hours a week — hard, hot work — and I made $40 a week. I was rich.

What’d you learn from that job that still applies?

Being frugal. Handing it well. Keeping a job and just doing the best you can possibly do. Be as productive as you can be. The man and woman who owned the store, those people became great references for me. Reputation is everything. That’s what I learned from it.

What’s the best advice you’ve received?

Trust your intuition and your gut-feel. I haven’t always obeyed that but I wish I had. Your gut-feel generally will often tell you or validate your perception of something or some event. Trust your innate gut feel.

What’s your favorite board game and why?

My family plays a game called Pictionary, and the reason I like it is it forces you to laugh at yourself. You can laugh at yourself and each other. Honestly, it’s taught my children to be able to laugh at themselves. Don’t take yourself too seriously.

How hiring an executive coach in a downtime lays the groundwork for a rebound

Jeremy Hittle, president, Hittle Landscaping Inc.

When Hittle Landscaping Inc. lost 30 percent of its revenue during the recent housing market crash, President Jeremy Hittle had some difficult decisions to make. The first one was how to bring the $10.4 million family-owned company out of the funk. That took teamwork and some painful choices.

But equally as tough was to decide whether or not to hire a pricey leadership coach who could teach the Hittle management team the skills needed for long-term prosperity.

“It was expensive and it was difficult to spend the money in times like those, but it had to be done,” Hittle says.

“When the housing market crashed, we had to react to it quickly. Getting the upper management team together to fight the fight was a lot better than me just fighting it myself.”

The decision to hire an executive coach often requires considerable discussion. A business must tie it to an analysis of expenses, how to increase revenue and how to increase efficiency.

“You need to discuss what’s a better way to manage your business, manage your people, manage your customers,” Hittle says. “The lists will get very long and very hard to manage. How can you ask the employees to work harder? You can, but what’s that going to get you? So better leadership skills are a great way to improve efficiency, morale and communications. That’s where efficiencies come from. Efficiencies don’t just come from working harder.”

Hittle asked consultants to suggest a coach, and he hired one who had also written a book on leadership. Weekly and biweekly sessions helped the management team set goals and provided different ways to think about situations.

“It really makes a difference,” Hittle says. “There is a lot of frustration today in leadership. Frustration just doesn’t help. It’s kind of like carrying around baggage when you’re trying to be a leader.”

The personal leadership development benefits can be significant.

“It’s been great. It’s fascinating when a person does decide to consider his own leadership style, develop upon that and grow on what he’s found,” Hittle says. “I know it’s been huge for me, and I have had several employees step back and say, ‘Wow, I better understand my job now. It’s not just to tell people what to do. It’s about being supportive. It’s about accepting better who you’re managing.’”

The term “supportive” is a key operative word that is stressed in the leadership sessions.

“Employees need to know how valuable they are to the organization,” Hittle says. “You don’t want them to feel like they are employees ― you want them to feel like business owners. They all should feel like they have their own small business that they run beneath them. They feel like those beneath them are the employees that they employ, that they support, encourage and direct.”

That support helped the company reclaim 60 to 70 percent of the revenues that were lost and racked up near-record profitability for 2010.

Compassion is another focal point of leadership training.

“Listening, understanding what they want, and giving it to them,” Hittle says. “It’s not being a leader by directive. That’s not what to shoot for. Shoot for trying to nourish their needs, and your needs become their needs.

“A lot of leaders don’t quite understand it because they just want to have the first and the last say-so, and they expect it to be done that way. I don’t believe that works very well.

“Usually people that excel to a leadership position are firm-minded thinkers,” Hittle says. “They don’t realize that you have to open up, be a little vulnerable, and ask for some help and do some self development ― to try to pass along the message that we can all be better.”

How to reach: Hittle Landscaping Inc., (317) 896-5697 or www.hittlelandscape.com

Trimming and pruning

With a significant portion of its business tied to the housing industry, when the market hit bottom in 2009, Jeremy Hittle and his management team had their plates full learning how to be better leaders while they trimmed and pruned Hittle Landscaping’s operations to weather the storm.

“It was my job to not give direction but to convey a message,” says Hittle, president of the 140-employee company.

“The message was that we are in trouble, and we need everybody’s help. I spent a lot of time in 2009 making sure that nobody thought otherwise. I tried to make sure that they knew that the company’s challenges were their challenges ― that we were all in it together.”

The solution was plain and simple: Everyone needed to be in concert and do some brainstorming.

“The only possible way to get out of a downturn like that was to come up with 50 ways that would help,” Hittle says.

“Obviously we had to lay off some employees, and we changed things around,” Hittle says. “Nobody worked any overtime. We worked four days a week instead of five. We saved on travel.”

Steps taken to recover from the downturn are lessons that likely will be retained.

“We are constantly working on reorganization. Even today, it’s about how we are going to change today to deal with tomorrow, just like we did back in 2009.”

How to reach: Hittle Landscaping Inc., (317) 896-5697 or www.hittlelandscape.com

Increase in July payrolls may soothe recession fears

WASHINGTON ― U.S. job growth accelerated more than expected in July as private employers stepped up hiring, a development that could ease fears the economy was sliding into a fresh recession.

U.S. payrolls increased 117,000, the Labor Department said on Friday, above market expectations for an 85,000 gain. The unemployment rate dipped to 9.1 percent from 9.2 percent in June, but this was mostly the result of people leaving the labor force.

The payrolls count for May and June was revised to show 56,000 more jobs added than previously reported

The report was the first encouraging piece of economic data in some time.

Fears that U.S. economy might be sliding back into recession, coupled with Europe’s inability to tame its spreading debt crisis have roiled global financial markets. Economists see the odds of a recession as high as 40 percent.

U.S. stocks on Thursday suffered their worst sell-off in two years.

Top policymakers at the Federal Reserve will sift through the report when they meet on Tuesday but are not expected to announce any new measures to support the sputtering recovery.

The U.S. central bank has cut interest rates to zero and spent $2.3 trillion on bonds. Policymakers have said they want to see how the economy fares before taking any further action.