Many use mistakes to build stronger company

Sunday, October 4, 1998

BY JOHN ECKBERG
The Cincinnati Enquirer

No company on the Cincinnati 100 got there without making a few mistakes or weathering a bureaucratic mishap or two -- something known in self-help circles as "critical learning opportunities."

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Some errors were small. Others were big.

Some were bigger than big.

Rumpke Consolidated Cos., a newcomer to the Greater Cincinnati 100, had the largest garbage slide in the history of landfills at its mountainous Colerain Township landfill in 1996. About 30 acres of the landfill slid in a broad ridge and after thunderstorms struck, lightning set the exposed waste on fire.

It was a genuine calamity, set back corporate expansion plans in other markets and led to the largest environmental fine in Ohio history -- a $1 million sanction imposed against the company by Ohio Attorney General Betty Montgomery.

Today, the price of the slide is pegged at $20 million, said William Rumpke Sr., co-chief executive officer of Rumpke, an amalgam of 20 corporations.

[rumpke]
Cousins Tom and William Rumpke at the 10-million-cubic-yard expansion of their company's Colerain Township landfill.
(Yoni Pozner photo)

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With the livelihood of 2,800 employees at stake -- 75 of them blood relatives to the CEO -- the company had little choice but to pay the fine. The firm immediately regrouped. It eventually extinguished the fires, fixed the slide and paid for it in part by selling off routes in St. Louis, Kokomo, Ind., and elsewhere.

The company is now looking toward the future. Revenues from fiscal year 1997 were $230 million, and plans call for annual revenues to approach $300 million by the end of the decade. Before the landslide, the firm accepted 27,500 tons of waste a week.

Now, it averages 23,000 tons.

"There's books written that say to have success, you must have failure first," Rumpke co-chief executive officer Tom Rumpke said. "That landslide could be considered a failure. But we regrouped, and now, we are financially stronger."

At a time when other companies are abandoning plastic recycling, he said, Rumpke has a plastic recycling plant in Dayton, Ohio, that will eventually be able to process 100 tons a day.

"Drink a bottle of pop today, and a month from now, it might be a T-shirt," he said.

Ralph G. Anderson, president and chief executive officer of Belcan Corp., also takes a long view when it comes to mistakes. Providing staffing and technical services to companies brought the firm $400 million in revenues in 1997. The firm is highly touted in its field and contracts with industrial giants Pratt & Whitney, General Electric and Rolls Royce among others. Of nine major lines of fighter jets in the world, company staff worked on six. He said errors can haunt every endeavor of every company.

"You learn lessons by making mistakes," Mr. Anderson said. "But you don't want to make too many of them. You have to keep an eye on your people and what they do."

For every mistake comes a surprise and many a pleasant. For example, who could have dreamed 15 years ago that people would buy in astonishing numbers little bottles of plain water?

"It has changed the industry," said Walter L. Gross Jr., president of G&J Pepsi-Cola Bottlers Inc. "We added Avalon spring water three years ago, and sales have grown steadily. Aquafina was added this year, and it is selling faster than the supply.

"I didn't know how popular the little bottles would be."

One mistake many companies make involves not keeping up with technological changes. But chasing ever-churning technology does not have to bomb the balance sheet.

Within the past decade, Fischer Homes embarked on an initiative to update software, create a Web site and embrace technology. Overall, it was a success, Fischer Homes President Bob Hawksley said.

"As an industry, home builders are dinosaurs when it comes to information technology," Mr. Hawksley said. "Our company is in the top 25 percent."

The company has computerized all facets of home-building operations including architecture, estimating, marketing and purchasing, he said. Yet there are some glitches to the information era, he said, and the worst might be functional obsolescence, which he thinks is built into every computer system.

"It goes with the territory," Mr. Hawksley said. "The key is making sure that when you run out of capacity, you have something that works with other systems that are integrated. You have to look further than the headlights, and sometimes you get it right.

"And sometimes you don't."

Sprinting to stay ahead of the technology curve is a challenge for wholesalers, as well. Fred Habegger, president of Habegger Corp., a wholesale distributor of Bryant and Carrier heating and air conditioning equipment in Ohio, Indiana and Kentucky, said customers now have access to company computers.

"They can check pricing, check availability, and even place an order without being put on hold or waiting for someone to be available," he said. "All our outside salesmen have laptop computers tied into our mainframe, and they become traveling offices."

Keith McCluskey, president of McCluskey Chevrolet Automotive and the Auto Nation USA franchise at Fields-Ertel Road and Interstate 75, said computer technology brings sales and revenue growth but cannot be the focus of a retailer.

"You don't want to grow for the sake of revenue growth and forget about the experience that each individual guest has at your organization," he said.

Mr. McCluskey said one of his company's initiatives that is emphasized today and will be critical in the future is to find and attract quality employees.

"Our managers set aside 15 percent of their day to recruit," he said. "We need to think about those first-round draft choices and how to attract them to our dealership."

He said companies will find that hiring the top picks is the best way to bump production and revenues in the economy of the future.



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