Global South Metro Exchange
Featured In Issue: CLT.biz Insights 16.10.08
Southeast Synergism Collaboration is the New Competition The Global South Metro Exchange held its first event in Greenville in July, branded “Collaboration is the New Competition,” sponsored by JPMorgan Chase, with support from the Brookings Institution. Multi-regional business leaders coalesced…Read More »
There is no doubt about it. Charlotte is becoming a global city-state! We have prepared…Read More »
Charlotte City Council approved a $900,000 expenditure of airport funds for a consultant study as…Read More »
The Truth About Immigration by Steve Rattner Perhaps the most emotional issue of this year’s…Read More »
The Charlotte metro is the fastest-growing in the United States. From 2009-2014, 634,000 people people…Read More »
Click here for Full screen version / Youtube video Immigration: the new Godwin’s Law This map shows…Read More »
Now we’re talking about underwear on the Internet. Well, men won’t talk about it in the department store or anywhere else in public, so why not a specialty Web site? After all isn’t that easier than asking the 19 year-old female clerk at the store “Just how do these briefs fit?” Belmont-based yourunderwear.com caters to men who don’t like to buy at stores by providing designer quality undergarments – everything from T-shirts to socks and of course underwear – on the Internet.
“Undees, skivvies, undershorts…There are only so many ways to say underwear – and after all, that’s what we’re talking about.” Nolan Mills smiles as he describes how the company got its name. He and his partner Jimmy Poag have the background to make this site successful. Poag’s 15 years of experience in underwear engineering fit with Mill’s 10 years’ experience in the textile industry; together they know underwear.
Native Charlotteans, the two men met through mutual acquaintances in early 1998. Not long after, they put their heads together to go into business. While all duties are ultimately shared, Nolan Mills manages the marketing and Jimmy Poag is responsible for the technical aspects of the products. Both are involved with client satisfaction.
The two entrepreneurs’ strategy is to market a high quality product with a level of customization no other company offers, and to use the Web to keep prices competitive. They have taken the attributes of top designer brands and rolled them all into a single premium line of men’s undergarments. Along the way, they have made some improvements. The T-shirts are longer, the briefs fuller, and the socks softer than comparable products.
In July 2000, when the site is revamped, clients will be able to customize the fit even more. As Mills explains, a 6-foot tall man and a 5’5″ man, each with a 42-inch chest and 34-inch waist, need different lengths in their T-shirts and in the legs of their boxers. One size really does not fit all. Taking this into consideration, your-underwear.com will offer more varieties of sizes that are suited to men’s different body types than the traditional small, medium, large and extra large method. The site will have a table with height and weight that customers can use to find just the right size product for their body shape.
But even with all their customization, Poag and Mills are able to keep costs down by using the Web to sell directly to the consumer. By simplifying the packaging and eliminating the overhead that brick and mortar retailers encumber, their prices are competitive with comparable retail brands.
Their knowledge of the industry and how sizes and qualities differ should also give the two men an edge. Little things like knowing knits only shrink seven percent, while boxers don’t shrink at all, are important when calculating size and fit. All of the yourunderwear.com products are made in North Carolina by Beltex Corporation, a manufacturer of premium undergarments for over 55 years.
It’s not that most men don’t care about their underwear, it’s that they don’t make time to buy it. They let the women in their life purchase underwear for them. In fact, more than 70 percent of all men’s underwear is bought by women. So Mills and Poag are letting their clients, both men and women, discover what they like from their Web site.
Men may want to try the boxer briefs or boxers, but they really don’t want to agonize over the decision with a clerk in a department store comparing brands, prices and fits. “That’s why most men buy something and wear it until it falls apart,” say Poag. “We want to offer men an easy way to figure fit and pick a style. Try it. If you don’t like it for any reason send it back.” They really mean that too.
Since November of 1999 there have only been two returns which resulted in exchanges for size, beams Poag. “I’m not saying that something couldn’t slip through, because anything is possible, but our quality control process is quite detailed. It is checked at every stage of manufacturing, including being checked by a Zero Defect team, and again at packaging. The little stickers you see when you unpack the garments – ‘Inspected by #7’ – well there really is a number #7.”
Not that there haven’t been some challenges to overcome. They had a great idea, the business experience, but not the technical expertise to bring the dot com to life. They found an advertising agency, a web boutique and a hosting company and utilized their own graphics talent to design the site. The Web site went live November 15, 1999, coupled with local advertising on television and radio. The original hosting company wasn’t able to keep up with the demand, though, which caused the Web site to stall or fail to load altogether. It’s the kiss of death for a dot com. “It’s quite serious. You can lose a customer in 16 seconds on the Web,” says Poag. As of January 2000 they were using a new host provider and the Web site problems have been resolved. This summer, they are planning a major nationwide advertising campaign to announce the revamping of the site.
Yourunderwear.com is designed to provide premium quality underwear, at half the designer prices, with accurate fit for a client – who really doesn’t want to shop for them at a store anyway. They’ll even offer you the opportunity to subscribe to regular shipments on a schedule that you determine. Either way, they’ve got you covered.
He wanted to play football. As a youngster growing up in Charlotte, Yates had the size and athletic ability to be a good player. What he lacked was permission. Robert’s father, a Baptist minister, wouldn’t allow his son to participate in the sport. So instead of scoring touchdowns or intercepting passes, Robert developed a different pastime – working on cars. As it turns out, he was pretty good at that too.
As he works his way through his 33rd Winston Cup season, Robert Yates has mixed emotions. He’s the owner of the reigning Winston Cup Series Championship racing team andat the pinnacle of his profession. He’s already won the Daytona 500 this year, and both his #28 and #88 cars are in the top 10 for Winston Cup points this season. And yet, something is missing. Racing has changed, and while NASCAR’s success has been good to Yates, the distinguished, soft-spoken master engine builder oversees a far different operation from the one he first joined back in 1967.
“I don’t feel like I’m contributing as much to the team anymore,” he says wistfully. The desk in his office, which he once rented out for a time, is bare except for a few family photographs and models of his two racing cars.
Yates explains, “About the only time I’m in here is to hire somebody or fire somebody. I’d much rather be out in the shop.”
Yates’ challenges have changed as his organization and the sport have grown dramatically. One thing is certain, though. He has worked hard his entire life, and he’s not about to stop now.
Born in 1943 as the youngest of nine children, including twin brother Richard, Yates grew up in the shadow of the Allen Street Baptist Church his father pastored.
Yates credits his upbringing for giving him the proper perspective on life. “The family I was so lucky to be a part of gave me a good understanding of why we’re here, what this life’s about, and how to get through it.”
Yates watched how his father worked with people and saw firsthand the poverty that surrounded them. He developed a strong work ethic and an understanding that nothing in life is free. “We would never go to my dad for Coke money,” he says. “But if I needed a schoolbook, he would get it.” Robert and Richard delivered the old Charlotte News and later took on several Charlotte Observer routes. They cut the grass of their father’s parishioners’ yards and saved money to buy their own bicycles.
Yates was a big and strong kid in his early teens. He wanted to play football, but a heart murmur from a childhood bout with rheumatic fever precluded it. His parents wouldn’t sign the release form. Because he couldn’t play football, Yates pursued what would become a lifelong love affair with that gleaming symbol of post-war America: the automobile.
With the help of a trade-in from their father, Robert and Richard bought their first car, a ’57 Chevy, with the money they had earned. The church had in the meantime bought a home for the Yates which had an unusual feature for the time: a two-car garage. After school the boys would come home and spend hours in the garage working on their car.
“We came along at the time when automobiles were popular,” says Richard. “People needed to have work done on their cars and Robert and I both liked tinkering with cars and enjoyed the mechanical side of it.”
Robert was especially adept and would work on wealthier kids’ cars, then use the money to buy the parts to fix his and Richard’s. He was a natural mechanic and was “busier than I can tell you, because I could do anything on a car.”
They didn’t fix their car just to keep it running. Working on it became a passion. As Robert remembers, “We had more backup engines than we do now for Winston Cup racing!” On occasion, Robert would ride on the front bumper while Richard drove with the hood open, so Robert could listen to the engine and adjust the timing.
Robert also had a taste for speed and channeled the competitive impulses he couldn’t use in football into drag racing instead.
“I also spun my wheels around the church a lot. Probably interrupted a few prayer meetings,” he admits. “But when I raced, I loved hurting people’s pride when I beat them.”
Yates saw the first NASCAR event at the Charlotte Motor Speedway when it opened in Concord in 1960. He was 17. At the time neither of the boys could imagine where their lives would lead them. “Oh, we never thought we would end up in Winston Cup racing, because when we were teenagers, our idols were guys like Ned Jarrett, Junior Johnson and Ray Fox,” exclaims Richard. “We never knew that we would end up knowing them and competing against them. It’s mind-boggling.”
Robert’s goal was to get an engineering degree from N.C. State. But, as it would do many times, his life took a different turn. “Along the way I met this girl who convinced me that she loved me the way I was,” he says. “I was a mechanic and she accepted that. We got married, and after that, I had to earn a living!”
Robert and Carolyn were married in 1965. He still had plans to work during the day and go to school in the evening, but found he couldn’t do both. At the age of 24, he went to work building engines at the famed Holman-Moody racing operation. “We worked from eight in the morning till ten at night,” he recalls. “And they expected you to work on Saturdays and Sundays.”
The very next year, though, Ford quit racing. His hours cut drastically, Yates looked for other work. By now, he had gained a reputation as a highly accomplished engine builder. He was eventually hired by Junior Johnson to lead his engine development program. Yates moved his family to Wilkesboro and helped propel stars such as Bobby Allison and Cale Yarborough. After five years of 18-hour days, his family convinced him to move back to Charlotte.
For the next ten years, Yates worked for and became a partner in the DiGard team and helped power the fortunes of such drivers as Darrell Waltrip, Bobby Allison, Ricky Rudd and Greg Sacks.
By now he had firmly established himself as one of the best engine builders in racing history. When the DiGard operation failed in 1983, Robert took some time off from racing. He tested synthetic fuels and even worked with the Pentagon on the project for awhile. But racing was in his blood. In 1986, he bought a former mill site just off Rozelle’s Ferry Road and began building engines for seven different race teams. Among them was Rick Hendrick’s. “I almost went to work for Rick,” says Yates. “And I’m sure I would have done well there.” Then he got a phone call to meet a man at the airport.
from builder to team owner
It was August of 1986 and the man was Harry Ranier. He and his partner, who had enjoyed success on the circuit with drivers like Buddy Baker, wanted Yates to become their team manager. Yates signed on, but once again the fickle nature of the racing business changed Yates’ course. In the fall of 1988, Ranier had financial problems and was forced to get out of racing. Yates wanted to buy the team. All he had to do was come up with the money.
“I sold every thread I had,” he recalls. Yates and his wife had made an offer on a house just before. Yates says, “If they had taken our offer, I’m sure I wouldn’t be sitting here today.”
He sold his house, got a bank loan, and applied some money he had already invested in the business and bought the operation for $1.7 million.
“It probably had a liquidation value of about $700,000,” says Yates. “But we had Texaco as a sponsor with a 3-year contract.” Things did not go well for Robert Yates Racing at the start, though. His first race as team owner was rained out. In the second race, the car wrecked and in the third, it burned to the ground.
“We got to the last race of the season in Atlanta thinking, ‘we’ll never make it. We haven’t earned a dime.’ ” They ran second, and Yates calls it the turning point for the team.
The lowest points in Yates’ career occurred only a few years later. In 1993, beloved driver Davey Allison was killed in a helicopter crash at Talladega. His replacement, Ernie Irvan, suffered a near-fatal crash the next season at Michigan.
“After both of those, I didn’t know how I was going to go on,” Yates says quietly. “We have had some real sad times.”
It took a while for the current driver, Dale Jarrett, to settle in, but with Jarrett driving the #88 Ford Quality Care Ford Credit Taurus, Yates now has his first Winston Cup Series championship.
Yates is well known in racing circles for his relentless commitment to excellence. He’s had his share of run-ins with NASCAR officials, who have disallowed many of his engine improvements.
“I’ve created a few rules,” he laughs.
In the midst of NASCAR’s recent success and the influx of corporate sponsorship and flashy megabuck owners, Yates is a throwback to earlier days.
“Robert is reminiscent of the original people who started this whole sport,” says H.A. “Humpy” Wheeler, president of Lowe’s Motor Speedway.
Mike Hargrave, director of sponsorships for Texaco, which still sponsors Yates’ #28 car, agrees. “Robert’s unique. He is involved every day and he works very hard so that his team is given all the resources it needs to be successful.”
Unlike most race teams, Yates has never had to participate in what’s known as the “silly season” trying to line up sponsors.
“I’ve known Robert in this sport for 20 years, and always had a lot of respect for him,” says Ricky Rudd, who is now the driver of Yates’ #28 Texaco/Havoline Ford Taurus. “The strongest suit of the Yates racing team is their motor program. There is no one on the circuit that makes more horsepower than the Robert Yates race organization.”
It’s a sentiment echoed by Humpy Wheeler. “Robert’s real fort? through the years has been his engines. He’s right there with the great engine builders of the past like Smokey Yunick, Ray Fox and Junior Johnson,” says Wheeler. “Robert learned a lot under John Holman and Ralph Moody and he’s one of the few guys left who worked for them. He’s always been able to get that extra horsepower out of a car.”
Adds Hargrave, “The Robert Yates name is synonymous with performance. The engines he builds are known throughout the world for their power and reliability. Havoline Oil is used in all of Robert’s engines, so when you think about the #28 car as a NASCAR fan, and when you think about Robert Yates Racing, you immediately think about Texaco. It has really built a positive bank of equity for us.”
Everyone who has been associated with Robert Yates has the utmost respect for him and for his commitment to the sport. “I couldn’t be more fortunate than to have the situation I have now to be able to join Robert Yates’ organization,” says Rudd, “Robert knows the sport and the business side of it inside out. The bottom line for me is, as a driver, he’s got winning race cars.”
a family affair
For Yates, racing is a family affair. “The key to this business is who has the most honest guy counting the money,” says Robert. In Yates’ case, it’s his brother Richard. “Growing up he was the most honest person I knew and he still is.”
Yates’ wife Carolyn, who encouraged Richard during the difficult early years, successfully headed up the team’s merchandise operation for a few years before retiring. He has a daughter, Amy, and his son Doug, who got the engineering degree from N.C. State his father sacrificed, is responsible for the team’s engine program.
For a few years, Robert and Doug worked side by side building engines. Robert, who spent so much time working when Doug was a boy, relishes the time he now has to spend with him.
Of course, racing isn’t the same as it was when Robert started. The days of having 10 employees, driving the race truck to the track and changing tires at pit stops for Yates are long gone. They have been replaced by 143 employees, including tire changing specialists and in-house experts who in some cases come to Yates from MIT and NASA.
Yates grins wryly as he looks over the vast array of high-tech computer testing equipment his racing team now uses. “Some of the things these computers reveal are what I could tell you just from listening to the engine,” he says. But as the costs to run a team grow, specialization increases and Doug takes on more responsibilities, Robert realizes his contributions to his team are changing. He’s still very much actively involved, but he’s definitely not a small operation anymore. Yates does own a boat in Florida, but all things being equal, he’d much rather be at the garage working on an engine.
Mike Hargrave of Texaco recalls what happened after a spectacular crash that involved one of Yates’ cars at the Bud Shootout earlier this year.
“When they brought the car back into the garage area, everybody was gathered around taking photos.
“Robert was looking at the crew working on the car, and the mechanic in him just wouldn’t let go. He finally grabbed a saw from one of the guys and started sawing off the front fender of the car. He loves what he does.”
And he’s not about to stop now.
They go together like hand and glove; or perhaps in this instance, like leg and stocking. Sisters Clare Cook Faggart, president of Concord-based Willis Hosiery Mills, Inc., and Suzanne Howard, vice president of manufacturing, always find a way to support each other. “We’re a team. If I’m having a bad day, Suzanne lifts my spirits,” says Faggart. “If she’s having a bad day, I lift hers. We won’t allow each other to have the same bad day.” The support the two sisters give each other is an essential ingredient in this third generation company’s success. Like other mills, Willis Hosiery has had to continuously adapt to the fickle nature of the textile business to survive. The company makes fashionable high-end custom hosiery products for such brands as Liz Claiborne, Jones of New York, Izod and The Gap and a private label for Marie Gray’s exclusive St. John Knits. They also produce socks for the parochial school market and a variety of other hosiery products. Fabrics, colors and patterns may change from season to season, but in this male-dominated business, Faggart thinks Willis Hosiery has a distinctive advantage. “Who better to make it than she who wears it,”she reveals. And while it may seem a bit ironic that a female-owned hosiery business should stand out, Faggart is matter-of-fact. “We’re accepted and respected as business people. No one looks at us as women; they look at us as professionals.”
Apparently the industry looks at them as very smart professionals. In December, Clare Cook Faggart became the first female chairperson of The Hosiery Association. This group, formed in 1905 as the National Association of Hosiery Manufacturers, now serves the international hosiery and related industries. The Hosiery Association may have been behind the times in taking so long to have a woman as its chair, but Faggart’s vision for the association is very much for its future. She hopes to use it as a catalyst to work more closely with consumers and suppliers and to share knowledge and technology. Her ability to look ahead has helped Willis Hosiery survive the “feast or famine” cycles of the textile industry. For example, Faggart made the decision to move away from contract work for other hosiery mills and focus on making, marketing and distributing proprietary products. She has also utilized sophisticated technology to diversify the mill’s product line, thus softening the blow of adverse economic conditions. With a constantly changing marketplace, Willis Hosiery has also had to be receptive to new products and innovations.
Cabinets running the length of the conference room are stacked with hosiery boxes full of developmental ideas. Fashion magazines are declaring this the year of the bare leg, so Willis is busy working with a new spandex product to wear with open-toe shoes. Tights In A Can is another new concept containing three pairs of childrens’ white tights and a set of colored permanent marking pens. The child may draw on the tights or have friends draw on or autograph them. Faggart’s aim is to find out what the customer wants and to provide it for her, constantly looking to make the customer happy with different patterns, colors, textures, and creative ideas. Still, surviving in today’s textile business is no easy task. The industry is highly cyclical; Willis Hosiery’s 144 knitting machines and three shifts do not always run on a full schedule. Moreover, each type of machine requires specific training. With the unemployment rate at less than one percent in Cabarrus County, finding and keeping quality employees has been a struggle. Faggart and her mother, Sue Cook, ceo, as well as other members of their staff, have even taken Spanish classes in hopes of communicating with and securing Hispanic workers. Ninety percent of the company’s 120 employees are female.
The two sisters feel they do have a different perspective on the female employees beyond benefits and competitive wages. They can empathize with their employees’ problems because they have the same problems too. “The employees know that we will do anything we ask them to do,” says Faggart. “We have dumped trash and unloaded trucks.” They have also made a concerted effort to operate the business as lean and efficiently as possible.
back to the future
Considering how close Clare and Suzanne are, it’s surprising that neither sister originally intended on working for the family business. The mill, purchased in 1927 by great grandfather, Edward King Willis, originally made cuff socks for girls and cotton stockings for ladies. “Mr. E.K.” as he was known in the community, had two daughters. Their husbands, Eugene “Gene” Clark Cook and M.L. Lafferty, took over the mill in the early sixties. In addition to the making of cotton stockings, the two bought a machine to make pantyhose.
When “Mr. E.K.” passed away in 1971, the Cooks bought out the Laffertys making Gene, his son-in-law, and daughter, Sue, the sole owners. Cook’s prescient vision of private labeling landed him the Saks Fifth Avenue account. He diversified, putting in place a cut and sew operation and a dyed yarns operation. He also began making maternity hosiery and socks for Izod. Cook included his three children, Clark, Suzanne and Clare in the business, working them part-time or having them tag along with him as he checked on matters at the mill. Oldest daughter Suzanne attended Peace College in Raleigh, then went into banking in the regional operations sector. Youngest daughter Clare attended Salem College in Winston-Salem for two years studying voice performance. On the completion of her sophomore year, her father had a talk with her. “He told me ‘Clare you have a beautiful voice, but you are going for a degree in voice performance,’ ” relates Faggart. ” ‘You can’t teach with that degree and if you don’t make it in the performing arts, you’ll have nothing to fall back on to support yourself.’ ” The next year Faggart enrolled at the University of North Carolina at Charlotte, finished her degree (in business) and took graduate courses in accounting. She went to work in the business full time in 1976, trading the spotlights of the stage for the fluorescent lights at Willis Hosiery. Gene Cook passed away at the young age of 58 and Clark assumed his father’s duties. Faggart persuaded her sister to leave banking and join the family business in 1988. In 1990, Clark stepped down as president of Willis Hosiery and Faggart took over. Suzanne Howard became vice president and along with their mother, Sue, as chairman of the board, the two sisters were running the show. They have help from the usual cadre of advisors: a banker, lawyer, and accountant offer sound business advice and guidance. This group is second only in importance to husbands, Jeffrey Faggart and John Howard, who lend their constant support. Faggart is a big proponent of teaching the consumer how to buy the product and what to be aware of with the labeling on the package. “Sizing is an issue,” she says. “Be honest about your weight. If it’s a close call, go up to the next size.” Faggart would like to see consumers buy the right product for the right event – sheer or ultra sheer for evening, trouser socks for slacks, tights for daytime, and support hose for comfort. As the chairperson for The Hosiery Association, Faggart will give her welcome and opening remarks at the International Hosiery Exposition on April 8, 2000 at the Charlotte Convention Center. She will be back onstage and up front. Her mother says that’s where Faggart is most comfortable. “Her background in the performing arts has served the company well. She has the knack of presenting herself and our product to other people to a great advantage.” “On the other hand,” Faggart counters, “Suzanne can fix any machine in the mill, rewire a lamp or start up the boiler. If the copy machine breaks, we call Suzanne.” As they head out the door at the end of the day, the two sisters give each other a “high five.” They are a team. And, today they both had the same good day.
Charles L. Fonville, Sr., got a little teary-eyed when the Small Business Administration named him the North Carolina Small Business Person of the Year for 2000. After all, he wasn’t trying to win accolades. He just felt obligated to give his employees his best effort. In little over a year, Southland Rebuilders (now Southland Remanufacturing.) has increased its workforce, expanded its business, and grown over 20 percent. All of this in spite of the fact that in 1998, the remanufacturing aspect of the business was in danger of closing its doors.
Charlotte, N.C.-based Southland Rebuilders was once a Ford authorized rebuilder and distributor of automotive electrical parts, and a distributor of a broad array of remanufactured parts to Ford and Lincoln-Mercury dealers. In 1997, however, the Ford Motor Company began to eliminate its national rebuilders program, putting Southland’s remanufacturing plant in jeopardy. Ford decided to contract with Southland only for parts distribution, which required a much smaller workforce and left the remanufacturing plant quiet. Many Ford authorized rebuilders shut down, closed plants, and laid off employees. But Fonville wasn’t so hasty. “I stood up in a meeting and said, ‘I’m probably the craziest guy here, but I’m going to build a big warehouse.” Despite the bleak outlook for the remanufacturing operation, in 1998 Fonville poured $3.5 million into a new warehouse facility to accommodate their growing Ford distribution contract. “I didn’t know what we were going to do with the [remanufacturing] plant, but I was sure we’d find something.” That something wasn’t so easy to come by. Fonville had strict requirements for his remanufacturing operation. “I didn’t want a contract,” says Fonville. “Contracts have a way of coming and going.” The company created a company profile of Southland’s remanufacturing resources and launched a search throughout North America and Europe for a partner. Unbeknownst to Fonville, Freightliner Corporation was shopping for joint venture partners to remanufacture automotive parts in different product categories. Freightliner was executing a strategic plan to produce a new line of truck automotive parts under the Alliance brand name. Southland’s company profile landed on the desk of the president of Freightliner, and Fonville met with the company in June 1998. “After our first meeting, there was never any question in my mind that we were going to do a deal with them.” The deal was a 50-50 joint venture between Southland and Freightliner to remanufacture electrical parts for heavy duty trucks to be distributed by Freightliner. Yet the deal wasn’t signed until March 1999, which left a lot of down time for employees. Fonville wisely kept the channels of communication open between management and his workforce. “We didn’t lose people in the transition because I communicated to them what was going on. They knew we were trying to make something happen,” notes Fonville. “I wasn’t ignoring the problem and I wasn’t ignoring them.”
Still, as Ford wound down their remanufacturing needs in late 1998, plant employees turned to housekeeping and other busywork. During the weeks of uncertainty, Fonville never closed the plant, retaining every employee. Many workers had been with Southland for over twenty years. “I felt obligated to my employees,” he reflects. “They are our biggest asset.”
The original company, Southland Rebuilders, evolved into two distinct and separate companies. Fonville created Southland Dealer Services to handle the new expanded Ford distribution contract. Southland Rebuilders was renamed Southland Remanufacturing, to reflect the partnership status with Freightliner Corporation. Instead of losing his business, Charles Fonville had gained an additional one. He marvels at the outcome, “I felt wonderful that we were able to come up with a new activity for the plant, keep people employed, and expand that workforce. We had about 23 people in remanufacturing at the time; now we have 50.” He continues, “If you hit a bump in the road, sometimes you can turn it into an opportunity.” Fonville certainly would now. This wasn’t the first time he had reinvented Southland Rebuilders. In the early 1990s, the company earned nearly 5 percent of its revenue from remanufactured Ford engines. Sensing overcapacity, Fonville opted to exit the engine business and re-engineered his plant toward electrical parts. This major shift required a substantial financial outlay, but Fonville believed this direction was the best strategy for longevity. This decision turned out better than Fonville ever realized; Ford began to wind down its third-party contracts and ended its engine remanufacturing program a few years ago. Fonville credits his seemingly boundless energy for sustaining him during the tough times. “Because of circumstances, certain things did or didn’t work out. But I’m an optimist,” he says. “If you’re creative enough, instead of closing the plant, you realize that your assets in terms of people, systems, and processes can have value in another situation.” Staying ahead of the curve, anticipating and responding nimbly to change has been Fonville’s greatest asset. He continues to press ahead to better position his companies in the automotive industry. Southland Dealer Services, the Ford distribution unit, and Southland Remanufacturing, the Freightliner venture, have invested heavily in e-commerce. Fonville explains, “We want to be more responsive to the dealers we serve. They should be able to check on and order parts twenty-four hours a day, seven days a week. With e-commerce they can do that.” Remanufacturing is actually a two-way business. With a ready fleet of tractor trailers, Fonville’s company delivers remanufactured parts and also picks up cores (items to be remanufactured). “We have to retrieve those; they are valuable. It’s a 360 degree business.” In turn, Fonville sells cores to other remanufacturers. The company also sells Motorcraft, Ford Accessories, Ford Chemicals and other products to its Ford and Lincoln-Mercury dealer customers. Fonville, a Burlington, N.C. native, started out in real estate. After graduating from Davidson College, he did a tour of Army service before returning to his hometown. He followed his father’s footsteps into real estate but found the economic activity of then-sleepy Burlington lacking. He moved to Charlotte in 1959, working as a salesman for National Cash Register Company for nine years. After a stint at Interstate Securities, Fonville went to work in his brother-in-law’s corporate financing operation. In 1972, Fonville spun out on his own. “I founded Fonville & Co. in April 1972 with $2000, a smile and a shoe shine,” he quips. Fonville & Co. was a corporate financial consulting firm specializing in mergers and acquisitions and financing.
In the early 1980s, Fonville acquired Southland Rebuilders from the Sherrill family, owners of the S&W Cafeteria chain. Fonville then set up Southland Rebuilders under the corporate vehicle, Fonville & Co. Fonville & Co. is now the umbrella for other businesses as well. Fonville’s present holdings include Southland Remanufacturing and Southland Dealer Services, as well as Hi-Tach Oil Co. and other entities. The business fiefdom also contains numerous real estate holdings and significant venture investments. Fonville is proud to count his children as key figures in his daily operations. Daughter Amy Owen, a Morehead Scholar and Darden Business School alumna, is vice president. “Amy has been very involved in strategic issues,” he says, referring to the company’s new direction. His son, Charles Chuck, a Davidson graduate, has also strengthened the company’s management team as vice president of sales. Fonville is a hands-on manager, rarely at his desk and usually among his employees. “I enjoy creating opportunities for people, watching them grow.” And grow they do, as Fonville plans bigger and better things for the Southland business units and Fonville & Co. “The automotive industry is a mature industry and we are exploring ways to diversify.” Part of that diversification strategy is exemplified in Fonville’s recent investment in an Internet company. Earlier this year, Aida Alvarez, head of the U.S. Small Business administration, announced Fonville’s award. He will go to Washington, D.C. the week of May 21-27 as the North Carolina Small Business Person of the Year for 2000 to compete against 52 other winners (50 states plus Washington, D.C., Puerto Rico, and Guam) for the national award. Fonville contributes to the community through various charitable organizations and posts. At age 64, he certainly isn’t slowing down. “I don’t have any plans to retire.”
For the past three years, The LearningStation.com has been quietly developing the nation’s leading educational subscription-based network. Now the company is looking to expand its reach. If it’s successful, LearningStation could revolutionize K-12 education throughout the country – even the world. All it has to do is convince educators to totally rethink they way they operate. Jim Pennington, a business strategist from northern California, launched LearningStation in Charlotte three years ago. With the help of local entrepreneurs Craig Larsen and Jim Kirchner, he is trying to change the way educators think about technology in the classroom.
The company is an Application Service Provider (ASP) that provides schools with access, by rental or subscription, to educational applications and content via te Internet. LearningStation has aligned itself with leading educational software makers, signing distribution deals with companies like The Learning Company, Saratoga Group and SkillsBank. Pennington decided early on that traditional attempts to market Internet-based educational content were doomed to failure because they threatened traditional teaching techniques.
So in addition to bundling curriculum software, LearningStation provides software tools that help teachers focus more on teaching and less on administrating. By getting teachers on board with the program, LearningStation is an easier sell to usually skeptical educators. In addition to potential resistance from teachers, LearningStation also faced some difficult technical challenges. While over half of U.S. schools are now wired to the Internet, most of those connections are slow and the computers are ancient by today’s standards. As they did with content providers, LearningStation developed several key strategic partnerships with technology companies.
Combining technologies from Microsoft and thin-client network specialist Citrix with proprietary software and an administrative program called DreamWriter I.T., LearningStation is able to deliver educational software applications to any desktop over virtually any connection, including a 28.8 KBs dial-up modem. It’s the first network of its kind in the country, and it grants new life to obsolete hardware. “One of the biggest benefits of this program is its ability to make use of the school’s existing resources – outdated or older computing equipment of any model – and to relieve the school systems of the burden of managing and maintaining their network hardware and software,” says Pennington. “It creates greater efficiencies for the entire school district because software and servers are centralized and are maintained and upgraded by experts in the field. It’s quite cost-effective.”
In 1998, the Charlotte Chamber Information Technologies Council recognized LearningStation with the Blue Diamond Award for Innovative Use of Technology-Based Product or Service. One key company LearningStation partnered with early on was Computer Network Power, another Charlotte-based technology company founded in 1996 by North Carolina natives Craig Larsen and Jim Kirchner. Computer Network Power is a fast-growing network integration company that specializes in thin-client server computing. With revenues going from $650,000 in 1996 to $3.5 million in 1998, it serves about 125 clients, including Dale Earnhardt, Inc., Sound Choice and The Scottish Bank. Both men had worked together previously at what is now Osprey, a Charlotte-based enterprise resource planning provider, Larsen as controller and Kirchner as a sales and marketing representative.
Together, the three men saw an opportunity to leverage Computer Network Power’s strength in integrated thin-client solutions with LearningStation’s growing success as a provider of global, online educational materials. The result was a December 1999 merger of the two companies, which retains the name The LearningStation.com and combines the two staffs. “Our vision is to transform the possibilities for learning anytime, anyplace for anyone – and with this merger we have the tools to achieve it,” said Larsen in announcing the merger.
“From Computer Network Power’s standpoint, the merger helps take us from a regional integrator and puts us in The LearningStation.com’s global environment. Also, it gives LearningStation in-house capacity to maintain research and develop the appropriate infrastructure to support a large number of clients globally.” The company now focuses its resources exclusively on the interactive educational market. As a result of the merger, Craig Larsen is the chairman of the new entity and is responsible for financials. Jim Kirchner is the president and heads up operations and the company’s sales and marketing efforts. Jim Pennington is chief of innovation. The merged company boasts a staff of 45 employees, who work from offices on the I-85 Service Road, just off of the Sugar Creek Road exit in north Charlotte. LearningStation has ambitious growth plans for 2000, and hopes to have 100 employees by the end of this year.
LearningStation currently serves about 19 public and private school systems, including Charlotte-Mecklenburg schools, Mecklenburg Area Catholic schools, and school districts in Lexington (N.C.), Houston (Texas), Miami-Dade (Fla.), Newark (Calif.), and the New York City school system. The beauty of LearningStation’s service is that it provides a realistic and cost-effective way to leverage the Internet to deliver educational resources seamlessly to teachers, students, parents and administrators. Subscribing to LearningStation enables schools to run modern software applications on new, used and even obsolete machines.
The concept of a thin-client network, which has gained some acceptance in the corporate world, is ideally suited for the educational market. Unlike a conventional network, which often requires software applications to be loaded onto every computer, a thin client network serves programs from a local or remote server. In the case of LearningStation.com, all the client computers require is a browser such as Netscape Navigator. The potential implications of this method of delivering content are huge.
LearningStation can transform older PCs (386 and 486 processors) and Macintoshes into machines as effective as computers with the latest high-end Pentium or PowerPC chips for the K-12 educational market. Additionally, it can provide fairly inexpensive and virtually maintenance-free thin-client computers for its applications. Because it provides the applications from its own server, LearningStation eliminates the problems associated with cross-platform and outdated software.
“Schools are extremely excited to hear that they can get out of the hardware/software management business, and focus on using software to teach and guide,” reports Craig Larsen, LearningStation’s CEO.” And the fact that they can make good use of their installed base of cross-platform computers makes technology equally accessible to more students and teachers anyplace at anytime.” The company has developed partnerships with Time Warner Telecom and MCNC, which house and maintain remote server clusters in Charlotte and Research Triangle Park, respectively.
This allows entire school systems to access the most modern software applications. Given the beleaguering fiscal constraints of the nation’s school systems, the increased focus on learning proficiency and the goal of providing equal access to a quality education for both affluent and disadvantaged students, LearningStation could not be better positioned in the marketplace. As an ASP, it enables educators to rent a broad variety of today’s educational software while reducing their capital outlay for new equipment. At the same time, it delivers a high-performance method of deploying, managing and accessing business-critical applications throughout the enterprise while safeguarding application performance, data security and administrative control.
If they can convince educators to buy into the concept, LearningStation will also be able to capitalize on the ongoing wiring of school systems across the country. Nationwide, schools average one computer for every six students. According to Jupiter Communications, 11.4 million children, ages two to 12, are currently online, and that figure is projected to more than double to 24.3 million by 2003.
The Interactive Education Market
A primary goal of the current educational standards movement is to rectify unequal learning opportunities. A major watershed in this movement was the creation of the federal government-initiated objective, Goals 2000, in 1994. Goals 2000 established a clear expectation that all students would be held to challenging academic standards and that lower expectations for poor or disadvantaged children would not be tolerated. The U.S. Department of Education has stated a goal of having every public school wired by the year 2000, and according to the National Center for Education Statistics, expects to meet that goal by year end. Teachers and administrators are faced with increased accountability for student performance and parents are trying to take more responsibility.
Despite computer technology present in over 70% of U.S. schools, educators continue to rely on multiple sources for preparing lessons, measuring performance and reporting results – limiting their valuable time to help students reach newly expected academic achievement. By subscribing to an interactive educational ASP, the schools would have one convenient place for teachers, administrators and students to access instructional management tools, educational resources and student data, thereby focusing more attention into the classroom and making the instructional process more efficient.
With the benefit of an ASP, the classroom becomes the focal point from which teachers can create lessons and post assignments, students are able to retrieve assignments and utilize digital resources, administrators can obtain attendance and grades, and parents can receive messages and progress reports. In addition, teachers are able to tailor instruction to individual needs. Networks and computers have transformed the business world in ways that no one could have imagined a few decades ago. While computers have been used in educational administrative offices and some classrooms over the past decade, they have not yet been fully integrated into the learning process. Lack of funding, technical complexity, and ever-changing software applications have all contributed to slow the enterprise-wide adoption of technology in education. However, social and political forces are finally aligned in producing an educational environment where technology is funded and embraced.
Instructional technology expenditures are predicted to grow from $5.2 billion in 1997-1998 to $8.8 billion in 2001-20. Some of the largest growth areas within this market include telecommunication services, personal computers and educational software, according to Technology & Learning’s “Technology Expenditures Overview”.
More Bang for the Buck
Access to the LearningStation network allows schools to focus on the business of education and not the management of technology. Educators have access to vast resources of pertinent information, helping them to integrate technology and teach a better curriculum in a fraction of the time. LearningStation offers ways to lower both long-term desktop management costs, as well as short-term capital outlay. Their technology allows schools to use existing equipment to access the latest releases of software and educational resources. Using this cost-effective alternative, more students have access to modern software applications, improving the student-to-computer ratio substantially.
“Statistics show that up to 55% of our school systems’ desktop computers are incompatible with current software. It’s easy to see that the problem of staying current will eventually catch up with any school district,” points out Jim Pennington. “And that?s where this program will help.” LearningStation levels the playing field and ensures a computer savvy generation of learners.
Shirley S. Fahringer, Director of Technology at the Gaston Day School, concurs. “Through the use of LearningStation, we can now use a variety of age appropriate and diagnostic software for a fraction of the cost of purchasing and maintaining it ourselves. In addition to this cost savings, the Citrix platform used by LearningStation allows subscribers to use what is considered antiquated computer equipment (386 and 486 processors) at the same Pentium processor speed of the server bank at LearningStation.”
The Benefits of Using an ASP
Schools can benefit from using an ASP such as LearningStation, particularly as follows: Lower Cost of Technology Zona Research, a technology research firm, estimates that organizations can save 54% to 57% of system administration costs over a period of five years with a thin-client computing approach. Using the services of an ASP further reduces costs by eliminating software upgrades and inefficient purchasing volumes.
Learning Anytime, Anyplace Since applications and data are stored on the ASP’s server, access is available to students and faculty from any computer at any location and at anytime via an Internet connection. The desktop appearance is always consistent. Reliability and Ease of Use ASPs allow teachers and students to spend more time working on technology projects – such as accessing information on the Internet and using educational software – rather than spending class time fixing and upgrading PCs or adjusting software programs to suit each individual workstation. Users simply log on and access their applications and data.
Simplified, Centralized Management Skilled network administrators manage LearningStation’s servers, lifting this responsibility from educators, Updates and additions are made one time – at the server – and are immediately available to all users. Security Vital data and applications may be kept on LearningStation’s servers creating a higher level of security. Sensitive applications and data are made available to authorized users only via password protection. Data is effectively secured and backed-up centrally.
According to The Heller Report (August 1999), iMind Education Systems, Inc. (iMind) is LearningStation’s first competitor in the business of providing access to a library of educational software over the Internet. iMind was founded in 1998 and is headquartered in Mill Valley, Calif. James Ransdall, vice president of business development for LearningStation, points out that, while the business of distributing curriculum via the Web is the same, LearningStation integrates hardware as part of its solution, much like the cell phone industry does. Both use Citrix to deliver cost saving solutions to schools; iMind houses servers at schools, LearningStation maintains servers at server farms (or at schools if requested).
Both LearningStation and iMind are partnered with MediaSeek for aligning standards and software, and both are charter members of Sun’s SchoolTone alliance. Both also have the credibility f carrying software from The Learning Company. LearningStation, however, LSC is further down the road of signing up additional publishers. Though LearningStation was first to market, iMind could have an edge with its tutoring products. However, as LearningStation broadening partnering program could place it in the lead, as evidenced by its more than 1400 software titles currently offered. A more recent Internet education startup is Bigchalk.com, formed in January of this year from the combination of the online research services of Bell & Howell Company and Infonautics, Inc. Bigchalk.com, headquartered in New York, plans to build upon the predecessors services’ position in 40,000 schools to provide Internet-based learning tools that support the entire K-12 community.
The company recently acquired MediaSeek Technologies, Inc., a leading provider of Internet tools. Although it will have “advertising-free zones”, revenues from advertising and sponsorships will enable bigchalk.com to provide services free of charge to local school communities. Whether or not communities will accept such corporate-sponsored material in their schools remains to be seen.
Impact of LearningStation in Charlotte Schools
While SAT scores have steadily increased over the last few years in North Carolina, the state’s ranking in student performance hasn’t changed from 48th out of 50 since 1991. This ranking can be adjusted and even explained by some factors, but the magnitude of the deficiency indicates an immediate need for the delivery of better educational services.
LearningStation, along with some of its strategic partners, are coming together to provide North Carolina’s K-12 schools and teachers access to innovative online education software. LearningStation’s next-generation learning programs initially will be available to the Charlotte Mecklenburg School system and to school systems in the western and central parts of North Carolina, and ultimately on a national basis. More than 300 connections, reaching an average of 12 students per connection, will be activated in the pilot phase of the program.
Some of the first online programs include a student progress management system as well as self-directed teacher assessment and training tools. The packages conform to the State Department of Education’s Total Quality Education Program. Because the programs are standardized and made available online, students and teachers will have greater control over their academic progress and professional development. John Lassiter, vice chairman of the Charlotte Mecklenburg School Board, considers LearningStation “a great concept, a technical product that fills the cost gap.”
He notes that other less affluent communities have partnered with corporate interests to bridge the technology gap, leading to commercialization of the learning environment. He’s impressed that LearningStation makes use of otherwise outdated 386/486 computers, and that students, parents and teachers can access the system at all times from all places Together, he sees the potential for LearningStation to level the playing field for every student regardless of socio-economic position, but emphasizes the need for learning in the community about this approach and its impact on the education of children.
Vicki Wilson-McElreath didn’t plan to be an accountant. Working full-time during the day to pay for evening classes at Georgia State, she dabbled in everything from literature to criminology. At one point, she even considered being an architect. “My goals weren’t so much along what kind of career I wanted. I just wanted to do something that I felt proud of, something that was honorable.
Finally, someone said, ‘You should be a CPA.'” Wilson-McElreath had found her calling. For ten years she persevered in a long, yet steady course toward her undergraduate degree. Her commitment to personal betterment reaped rewards when she graduated summa cum laude with a stellar 4.0 GPA. It was only a matter of time before Wilson-McElreath would scale the heights of the accounting profession. So no one was surprised when PricewaterhouseCoopers LLP named Wilson-McElreath as Office Managing Partner of the Carolinas Offices last fall.
It was a natural progression for Wilson-McElreath, who is the now highest-ranking female executive among the Carolinas’ Big Five professional services firms. With a presence in 150 countries and territories, 155,000-plus employees, and $15.3 billion in revenues, PricewaterhouseCoopers is the world’s largest of the Big Five firms. Wilson-McElreath joins a hallowed group of only five women nationally in this position at the firm.
As Office Managing Partner, Wilson-McElreath is responsible for representing the firm in the Carolinas marketplace across all lines of service and industry groups. In addition to client work for Bank of America, she is charged with managing 1,000-plus employees – no easy feat. Wilson-McElreath’s ascent up the corporate ladder into high-risk, high-stakes accounting is a remarkable testament to her intellect and steely determination.
Growing up in a family of modest means, she wasn’t exposed to many career opportunities in her native Orlando, Fla. “My parents weren’t business people or intellectuals – they just made do.” But early on, her sense of integrity and strong values-based work ethic propelled her through an early failed marriage and a grueling series of jobs to pay the bills. The odyssey to her top post began in earnest when she entered college as a part-time, evening student in 1969. “I was always working full-time, then I started taking classes at night,” she remembers. “I couldn’t afford to go to school full-time.”
Biding her time until her 1979 graduation, Wilson-McElreath embarked upon a colorful job history. She good-naturedly recalls a clerical job for the Florida Department of Agriculture. “I learned way too much about fruits and vegetables and the dairy industry.” But her stint as a secretary for the city engineering office in suburban Atlanta best highlights her can-do attitude. “My boss no more needed a secretary than I did, so I started watching the draftsman – they drafted drawings for bridges and roads.
Soon, I learned the skills, passed a test, and was a draftsman for a few years.” Studying at night and on weekends, Wilson-McElreath later took a job in an Atlanta art gallery. Not only did she learn about art, she expanded her thinking, “I learned a lot about people and diversity. It was good to be around people who think differently than I do.” Still, her ten-year struggle to complete her undergraduate degree was not without a personal cost. Higher education was increasingly expensive and Wilson-McElreath took short breaks to gather the funds to continue. “There were honestly times when I thought I couldn’t do it anymore. But I just felt that if I didn’t finish, I wouldn’t get settled into what I wanted to do.” Her ambition and drive pushed her forward to excel in every class, earning only A’s.
Although college naysayers proclaimed her “too old” to apply for jobs at top accounting firms, Wilson-McElreath received offers everywhere she applied. “I was a lot older than my peer group. I was divorced, and I owned a house. By and large, I was a bit of an oddity.” Accepting an auditor position in Charlotte with then PriceWaterhouse (the company merged with Coopers & Lybrand in 1998), she found the road to advancement to her liking. “In this business, if you do a good job, you can advance. I was always attracted to the idea of partnership, and I knew that if I could compete, I’d move up.” Wilson-McElreath excelled in her fiduciary responsibilities. Finding the accounting profession anything but boring, she worked toward the goal of partnership.
Eleven years after signing on with the firm, she made partner in 1990. Always seeking the next challenge, Wilson-McElreath jumped at the chance to relocate to Washington, DC. There, she assisted the World Bank and The International Monetary Fund in establishing accounting standards in developing countries. International experience is crucial for would-be executives in an era when clients are far-flung international companies, but Wilson-McElreath is more reflective on her posts in Bangladesh, the Philippines, Bulgaria, and Kazakstan. “To me, it’s just as important to get broad exposure.
You’ve got to be able to think outside of your own little world. I think the worst thing you can do is not think beyond where you live and work.” Returning to Charlotte in 1998, Wilson-McElreath was appointed Office Managing Partner in 1999. Though her career is studded with tangible resume builders, she epitomizes the more elusive hallmarks of leadership – vision and foresight. Nicholas G. Moore, Chairman and Senior Partner of PricewaterhouseCoopers, boasts, “Vicki is an outstanding example of the women who are leading PricewaterhouseCoopers into the next century.
Her combination of experience, service orientation, mentoring capabilities and commitment to volunteer activities enhances our ability to serve the business community of the Carolinas.” Wilson-McElreath is more modest. “I try to bring balance to work. You have to be passionate about core values, about things that involve life or death. But you have to add a balanced perspective with things that have to do with business.”
As Office Managing Partner, Wilson-McElreath still spends more than half her time working with clients. However, her management focus extends beyond banking into achieving synergies among the 50-plus partners and 1000-plus employees in her keep. She is committed to fashioning the best work environment in the merged firm. A part of that commitment is exemplified in her dedication to the firm’s mentoring programs.
PricewaterhouseCoopers realizes their staff and policies must reflect their client base, and the firm has made serious attempts to foster an inclusive and supportive workplace. Wilson-McElreath is spearheading that effort in the Carolinas practice.
She is an active participant in the recruitment and retention of employees – especially women and minorities. “We work to make sure we have a process to keep people from slipping through the cracks. The idea of helping people advance and do well is very important.” Wilson-McElreath names her husband, Jerry, as her most ardent supporter. Recently retired, he hasn’t missed a beat throughout his wife’s hectic schedule and overseas assignments. Despite her career success, Wilson-McElreath admits that the road to partnership may not be for everyone.
“I try not to forget how hard people work. We [the firm] are trying to get people to understand that you don’t have to be a machine to be in this business. You need your family, your personal life.” If she had to do it all over again, she’d choose exactly the same path -except she’d take more time to savor her accomplishments. With her business acumen and leadership focus, Wilson-McElreath would be an ideal entrepreneur.
But she isn’t so sure striking out on her own would be more rewarding than her current job. “You have your clients, your business, your responsibility to drive a practice. You are delivering a service personally. We have a lot of control in this business and I am extremely challenged with what I’m doing right now.”
In November, Marc Ostrofsky, a Houston entrepreneur, sold the Internet domain name business.com for a record $7.5 million. Whether or not eCompanies, the Santa Monica-based business development firm that purchased the rights, made a sound investment remains to be seen. What is certain is that the Internet is no longer the future of business. It’s the present. And the best-kept secret about the Internet is its impact on corporate and consumer brands. The reason investors have given money-losing Amazon.com a market capitalization of over $20 billion is simple. They are betting on the brand.
Like other Internet start-ups, Amazon is investing millions of dollars to establish itself as a premier online brand. The Internet is dealing each of these intrepid companies a once-in-a-lifetime opportunity to develop strong brands to compete against traditional large-scale “bricks and mortar” companies. Those same bricks and mortar companies have finally caught on and are pouring millions of dollars into their own Internet sites in an attempt to leverage their existing brand equity online. Whoever wins this battle of the brand wins the war. And consumer products are not the biggest battleground.
While much of the recent buzz surrounding the Internet has focused on the 300% increase in consumer spending on the Internet during the holidays, the real power of Internet-based commerce is business-to-business commerce. It accounted for $100 billion in revenues in 1999, according to Forrester Research, and even conservative estimates predict revenues will grow to over $500 billion within the next two years. In this special feature article, we’ll take a look at what some Charlotte area companies are doing to strengthen their brands and how they are integrating the Internet into their business practices. We’ll also examine the basics of brand development and how to build an effective Internet presence for your company.
New Focus, New Name
Charlotte-based Armilian Technologies is the new corporate identity for CADD Concepts, Inc. The company, which is a value-added reseller of high-end engineering software, decided to change its name to better reflect a broader emphasis on systems integration. “CADD [which stands for computer assisted drafting and drawing] was hot when we got into the business 10 to 12 years ago, but it’s very limiting now,” says company president Greg Lawrence. “We’re into a lot of other things.” The 30-employee company, whose client roster includes the North Carolina Department of Transportation, Duke Energy, Omni Architects, Lockheed-Martin, the Federal Aviation Administration and Alltel, competes regionally with smaller, local firms. In addition to offering expanded services, Armilian is building its business through a number of acquisitions.
The new identity had to encompass Lawrence’s larger vision for the company’s future. “We didn’t want something trendy, like so many of these new high-tech businesses that simply add a lowercase ‘e’ or ‘i’ in front of their name or add the word ‘tech’ to their name,” says Lawrence. “We wanted a name that’s distinctive and high-tech, yes, but also something classic.” Lawrence wanted a name that could be used on its own as an Internet domain name. The company had a logo of an armillary sphere that had been designed for a merger that fell through about a year ago.
“We liked the design of the armillary sphere. It has three rings that intersect, which nicely represents what we’re trying to do with the integration of our strategic business initiatives,” says Armilian’s Bob Hinson. “It’s also dynamic and symbolizes how we are charting and navigating our course for the future.” Lawrence considered hiring a naming consultant, but decided the company could handle the project in-house. It wasn’t easy, admits Hinson, “We thought we came up with some pretty good names. Unfortunately, all of them were already registered on the Internet.”
Since the company had the logo in hand, they examined how they could use the word armillary, and Hinson says that’s how they ultimately came up with the name: “We thought it had a sleek, high tech sound, and it’s unique.” Armilian has hired a designer to upgrade the company’s Web site and create a visual look that is more in line with the company’s new vision. Lawrence hopes to have e-commerce up and running sometime later this year, but has already started using the Internet to his advantage in other ways.
“We’ve got the capabilities to go across the Web to show drawings and even mark them up while clients watch the changes on their computer,” boasts Lawrence. “Any engineer who has the right software can collaborate on a project with another engineer and not be limited by geography.”
Armilian has also installed software on clients’ computer systems over the Internet. Says Lawrence, “We were able to log in and take over their server before their people came in to work.” By doing remote installations, the company saves on airplane trips, hotels and other travel expenses. All in all, Lawrence is pleased with the new corporate identity and is confident it will help him take the company further than its predecessor could have.
Targeting the Brand
First formulated in 1917, Cheerwine has built a loyal following throughout the Carolinas, eastern Tennessee and northeast Georgia. The cherry-flavored soda has a successful history in the brutally competitive soft drink market. In recent years, though, Salisbury-based Carolina Beverage Corp., which makes the concentrate and licenses companies to bottle and distribute it and owns several distribution companies itself, has faced increasingly difficult challenges. The industry changed in the late 1980s and those changes accelerated in the early ’90s.
“The ownership of several bottlers changed, and our product was discontinued since it competed directly with the new owners’ product lines,” says company president Mark Ritchie. “It wasn’t a huge blow. New geography isn’t necessarily a financial boon.” After focusing primarily on trade incentives and customer sweepstakes to drive volume, the company decided to shift its marketing focus back to a brand-building strategy. “During 1999, we realized that the promotional engine was running out of steam,” explains Ritchie. “The industry was offering promotions we couldn’t match. So we decided to switch back to an image-based strategy.”
Carolina Beverage’s advertising agency, Charlotte-based Wray Ward Laseter, designed a new campaign that targets Cheerwine’s primary consumer, teenage males. “Cheerwine has always been popular with youth, especially younger teens who are aspiring to be like older teens,” emphasizes Ritchie. “It’s a strong second choice for people, and it’s the first choice when you want something different.” He adds that the marketing message of Cheerwine has never changed: “It’s a unique product with a fun personality.” Wray Ward Laseter also totally revamped Cheerwine’s Web site, which has been running since 1997.
“They made it much more teen-oriented and added a lot of interactive features,” says Ritchie. “The Web site is one element of the whole effect, and the new design effectively reinforces our brand image. For a regional site that is promoted only through the packaging, we’re very pleased with the traffic we’ve seen on our pages.” In addition to a new online catalog, Ritchie says Cheerwine may do some actual site marketing this year: “With soft drinks, you can’t do any direct-selling of the product, so we just have to use it as an advertising medium to help sales at the store level.”
Selling the Brand
After a series of mergers and acquisitions, First Union found itself in need of a strong brand image in both its existing and newly acquired markets. “All we were known for was that we were the green bank,” says Ms. Parra Vaughn, vice president and “brand evangelist.” “The first thing we did was take a step back and ask our customers and employees what First Union meant to them.” After extensive research and some internal differences of opinion, the Charlotte-based financial services firm decided to stick with being green. Of course, a brand is much more than a color or a logo.
“You can’t make a brand from something that isn’t. You have to take what exists and work off of that,” notes Vaughn. “Our customers told us than in addition to being green, they considered us to be proactive and straightforward.” Working from that premise, the First Union team developed a brand promise: “Smart, straightforward financial solutions in your best interest.” Vaughn’s background with top brand marketers Coca-Cola and Procter & Gamble prepared her well for the challenges of building an essentially new brand.
“One thing I learned at Coke is that you keep it simple,” says Vaughn. She adds that getting employees on board with the brand concept proved to be one of the biggest challenges: “Employees must believe in the brand if we expect the customer to believe. The employee must understand the brand promise and be able to deliver it. There was some confusion here at First Union when we began to build the brand. Everyone said, ‘Oh, that’s the brand, that’s advertising. It doesn’t matter what I do because I’m not the brand.’ We really had to go through a massive educational campaign.”
The company pulled together a task force of about 30 employees who gave a series of talks to other employees about what a brand is, what the First Union brand is, and how to deliver that brand. This process took about five months. First Union’s internal employee television network ran a series of broadcasts about the brand. The company also has an ongoing educational process and what they call “brand boot camp” for new employees. “Every interaction a customer has with First Union either enhances the brand or degrades it,” emphasizes Vaughn. First Union’s collateral material uses clean, crisp design to emphasize their straightforward financial solutions.
Their “Financial World” television ads are “a little scary” says Vaughn. “We were a little concerned that the advertising might put some people off, but our testing showed that the message of this crazy, confusing financial world really resonated with people.” She adds that, moving forward, First Union will incorporate the television advertising into other aspects of their marketing. Vaughn says part of the plan is to emphasize that First Union is more than a bank: “I’m very happy we don’t have ‘bank’ in our name, because I think it’s going to give us an advantage as we try to break outside of being considered a bank.”
First Union also hopes to leverage its database of 16 million customers in the online financial services world, where the competition comes from different quarters than from the traditional banking world. Implementing the Brand Charlotte-based Bank of America is in the midst of the largest corporate brand conversion in history. It has involved the changeout of 40,000 signs across the franchise, 2,000 different forms, and 20,000 hours of computer programming. To make sure their investment pays off, bank officials wanted to be certain their new brand identity would bring them value for many years.
“We started the process with a complete brand audit of everything we do, from how we talk to customers to where and when we talk to customers,” says Mr. Tony Potts, corporate brand manager. “We did some preliminary work on our personality, basically, who we are and what the customers’ perceptions of all the former entities were and what they would like to see in a financial services brand.”
The brand team then interviewed thousands of associates, customers and business leaders across the country to help them develop what they hoped would be the premier financial services brand. After deciding on the Bank of America name, the creative team developed a graphics system to keep the brand message consistent across all business lines and in each of its various geographical markets. As with any project of this magnitude, Bank of America officials placed great emphasis on getting employees involved with the brand.
“We’ve been able to help people throughout the company understand that it becomes their responsibility to maintain the integrity of the brand,” says Potts. “It’s part of what they do every day. Whether you are a teller or a senior banking officer, we all have that same responsibility to maintain that brand.” Officials are confident that the new consistency across the brand will also help them market their online services. The company’s brand promise, that ‘we want to be the people who make banking work for our clients and customers in ways it never has before,’ is integral to their Web marketing efforts. “We have to be consistent, no matter where we meet our customers,” says Potts. “It’s important for them to quickly and easily recognize Bank of America.”
You don’t have to be corporate giant to develop a successful brand. Here are five key tips from Parra Vaughn of First Union.
1. Keep it simple. That’s the key. Coca-Cola has a worldwide audience, but everything they do is always based on three simple ideas: refreshment, sociability and authenticity.
2. Always remember that you’re not the customer. I’ve worked on brands that focused on young mothers, serious cooks, hot sweaty young males and urban youth, and I can promise you I’m none of those things. Don’t put your beliefs in place of your customers.
3. Make sure your employees believe in your brand promise. If they don’t, then you’re never going to build a brand. Explain to them that how they deal with each customer is either building or destroying the brand.
4. The emphasis on building your brand must start at the top.
5. Be consistent. Consistency builds trust, and trust is the foundation of brand loyalty.
If you look out Southern Real Estate’s 25th floor windows in the Bank of America Plaza building in downtown Charlotte, you can see firsthand the dramatic impact this company has had in shaping Charlotte. As the oldest real estate company in town, Southern Real Estate has assembled land and brokered deals for many of the buildings that give Charlotte its surging skyline, including the building that contains its offices and the newer Bank of America Corporate Center across the street.
The company has played an important role in creating University Research Park, developed over 40 shopping centers, worked with local colleges and universities, and helped develop the industrial market along Westinghouse Boulevard and the retail market along East Independence Boulevard. In fact, Southern Real Estate has worked closely with most of Charlotte’s top corporations. (see A Company of Influence.)
In doing so, the company has managed to achieve high level of success while maintaining a surprisingly low public profile. That may be about to change. As Charlotte continues to grow, new businesses in the community don’t necessarily have the kind of ties to Southern that have helped the company operate so effectively throughout the 20th century. And competition from new aggressive firms means Southern must develop strategies to continue its successful run into the new millennium. Leading Southern Real Estate into the future are Mr. Louis Rose Jr., ceo and president, and Mr. David Goode, executive vice president. They head a team of 15 dedicated brokers and a full-time staff of 30. Their strategy is to leverage their history as a strong local and regional broker while expanding their capabilities internationally. The strategy has already started to pay off.
Then and Now…
When Southern Real Estate opened in 1899, the economic and social effects of the Civil War were still fresh. The country had survived a depression six years earlier, and the economy of the New South was beginning to emerge. Streetcars ran up and down Trade and Tryon streets, cotton mills were popping up all over the area and many of Charlotte’s corporate giants were just getting started. In 1900, Charlotte totaled just 18,091 people, and Dilworth, Charlotte’s first suburb, consisted of less than 100 homes. Within the next 10 years, the city had grown to 34,014, an 82 percent increase.
And by 1940, Charlotte’s population topped 100,000, streetcars no longer ran the city streets and a national highway system was about to transform the area once again. Southern thrived through it all. Louis Rose Jr.’s father took ownership of the company in 1924 and laid the groundwork for its success. “In the years when Louis’ dad was here and up till now, Southern Real Estate has done work for most of the major corporations in Charlotte,” says David Goode, who joined Southern Real Estate in 1997 after working for Binswanger Company’s Southern Realty Group for 22 years.
“Most of these are home-grown firms, friends from way back.” The advantage of having been able to operate in the background for so many of Charlotte’s highest-profile projects is not lost on Goode. “The ability to do the kind of assembly projects downtown that Southern has done is much more easily accomplished by having someone with a low profile who knows all the people involved.” Such finesse came in handy in the mid-1960s when Southern stepped in to keep the offices of The Charlotte Observer at Stonewall and Tryon streets.
The Observer needed to expand its offices but lacked space. Louis Rose’s father brokered a deal for Jim Knight, the Observer’s publisher, to purchase the adjoining property adjacent to the existing Observer building, which then housed City Chevrolet. Rose also suggested to City Chevrolet’s Arthur Harris that property on East Independence Boulevard might be a better location for his dealership. The Observer stayed, City Chevrolet moved. Southern also assembled the land parcels for Central Piedmont Community College’s downtown campus.
“We dealt with over 30 individual owners of property,” notes Rose. “Although we had the right of eminent domain, we never used it.” Of course, times change, and Charlotte’s explosive growth means a whole new set of decision-makers have arrived in town. “I just read a survey that 70% of the population that currently resides in Mecklenburg County lived elsewhere 15 years ago,” says Rose. “That’s 350,000 people.” This influx of new people and businesses is one reason Southern is increasing its public presence.
“As we go forward, the people we have done business with know what kind of company we are,” points out Goode. “It’s going to be important that we generate the same trust for everyone else that these folks have enjoyed for the past 100 years. Frankly, without all these changes, our philosophy would have been to continue to maintain a low profile.” The company has begun to run print advertisements and even posted a billboard in October and November at the intersection of Third Street and Kings Drive.
More significantly, Southern Real Estate, which already belonged to a handful of national real estate networks, has affiliated with North American International (NAI), the largest real estate organization in the world, with over 3,000 real estate professionals in more than 230 offices worldwide. NAI provides international real estate services such as demographic analysis, site searches, subleasing, financial arrangements for major expansion programs, multi-site acquisitions and dispositions.
To Goode, the advantages are clear: “We are made aware of changes in pricing, availability and now have the ability to handle our clients’ needs on a much broader geographic basis. For example, I have been able to conduct business for Bank of America in England and Brazil, and Southern is currently handling transactions in the Carolinas for firms headquartered in 15 different states and in three foreign countries. Goode adds that one of the benefits of being in Charlotte is the city’s reputation as a progressive business center. “We get more inflow than outflow in terms of out-of-state work.”
Just as the Charlotte area has changed, so has the way of conducting business. “In the past, we could just say “I’ll meet you at your attorney’s office and close the deal,'” notes Rose. “Today, you have to have a paper trail and the professional staff to maintain it.” Still, Goode sees advantages for a family-owned business in the Charlotte commercial real estate market: “For one, the control is vested very tightly and the ability to get a decision -good or bad -is easier. In our business, where moving quietly means success or failure, it’s very advantageous that I don’t have to see 15 people to get a decision.”
Southern Real Estate is indeed a family business, now boasting its third generation. Both of Rose’s two sons work for the company. Louis III currently serves as Retail Director, and Caldwell is Director of Office Leasing. Rose’s daughter Jocelyn also has real estate in her blood, and is a very successful residential broker for Bissell-Hayes. “It can be tough working for Dad,” admits Louis Rose III, who joined Southern Real Estate in 1983. “I think his expectations are a lot higher than anyone else’s, but it has its advantages too. I’m learning from his expertise.”
Family clashes, particularly when two generations are involved, have driven countless family businesses into the ground. It’s an issue both generations of Roses seem to have a handle on. “Everybody’s brought up in different times. I was born during the Depression,” notes the elder Rose. “It concerns me to see a paper clip on the floor.” “Well you know, he’s actually right. He would pick up the paper clip off the floor. He watches every penny” responds Louis III. “But it is a different time, and there are some things we do differently. For example, today, you’ve got to spend money to make money.
There’s more competition out there than there was when Dad started out, and we’ve got to be up-to-date with technology and everything else to compete with other people who are competing with us for our type of business.” If past history is any indication, Southern Real Estate should be able to overcome any future challenges. In 1968, the company assembled 1266 acres for IBM at University Research Park. “IBM executives were flying down to make the announcement of their relocation to the property in Charlotte, and, before they landed, we found out from their corporate office that we had to obtain land all the way from Derita to the Research Park before they would give the green light for the project,” recalls Rose. “They wanted it for a railroad. Well, we pulled it off and the announcement was made, but I don’t think they’ve ever used it.”
As a successful corporate citizen of Charlotte, Southern Real Estate doesn’t hesitate to give back to the community. “We have two presidents of local and regional organizations coming out of this company,” Rose notes. “David Goode is the current president of the Charlotte Region Commercial Board of Realtors and Steve Banner, vice president of property management, is the current president of the Western Region of the Institute of Real Estate Management.” He adds that it’s important to give back to the community with your time, talent and financial support: “At Southern, everybody’s time is their own, but we have certainly found that the more you give in this community, the more you get back. It works both ways.” Goode also emphasizes that throughout the Charlotte region, there is a ‘strata’ of people who get things accomplished but don’t want a reward. “Things wouldn’t happen in this town without them.”