Shumaker Loop & Kendrick
Featured In Issue: April – May 2016
Seamless Integration of Expertise Yields Synergies Scott M. Stevenson, Charlotte Managing Partner; David H. Conaway, Warren P. Kean, Steele B. “Al” Windle III, [Representative] Partners Shumaker, Loop & Kendrick believes effective legal solutions come from fully understanding clients’ goals, visions,…Read More »
CSX Rail – Economic Developments CCX – Intermodal in Rocky Mount & Queen City Express…Read More »
Berkshire Hathaway Home Services Carolinas Realty
A Sign of Good Things to Come Thomas W. Camp, President and CEO; Stephanie Rhodes,…Read More »
As vice chairman of the World Steel Association, and recipient of the Steelman of the…Read More »
Global Ramifications of Brexit: Implications for the U.S. Gillian Tett, U.S. Managing Editor of the…Read More »
Hyde Park Partners
To see what could be versus what is.” That was the vision of Clifton Vann…Read More »
Engineering and marketing may not seem the logical combination, but when it comes to mixing things up Michael Cooney does just that.
His company, EngNet, with North American headquarters in Charlotte, is a small powerhouse that provides a range of digital marketing services to the engineering and industrial sectors across North America and the globe through focused strategies that take advantage of minimal costs.
“I received my training as an electrical engineer in South Africa,” explains EngNet CEO Cooney, who graduated in 1994 from the University of the Witwatersrand (Wits University), a world-class research university in Johannesburg, studying in the fields of Electrical Engineering and Heavy Current Electrical.
“Very quickly in starting my career, I realized, ‘Hey, this isn’t really what I want to do. I prefer the marketing side of engineering,’” he remembers.
By that time, he had built up a number of contacts in the industrial and engineering communities. At the same time, the Internet was becoming mainstream. He describes it as a seminal moment.
“‘Wow!’ I thought, ‘This is going to make my job easier. I can just go online and find all the information for these suppliers.’ However, it was still early days for the Web. I knew I could build into this space, but Yahoo! was still just a simple directory.
“So, I created EngNet as a categorized engineering directory to help customers find companies based on the equipment that our clients sold and manufactured.”
Creating an Engineering Network
Cooney decided to pursue EngNet, a portmanteau of ‘engineering’ and ‘network,’ full-time in 1998. But he had to overcome some resistance. The Internet was not as developed in non-Western countries at the time, and many industrial clients were reluctant to get involved. As a result, Cooney decided to take his operation outside of Johannesburg and aim for larger markets in the United Kingdom.
“I was in the U.K. for about six years, and I was getting U.K. clients, but at the same time, I was getting more and more companies from the United States that wanted to reach our audience,” he describes. “They liked our positioning with Google, and we recognized the opportunity provided by North American companies and decided to expand operations to the U.S.
“We chose Charlotte because we already had many companies as clients in the Charlotte region, including automation companies. And you simply can’t beat the weather here. In addition, the educational institutions are amazing.”
Unfortunately, while Cooney was starting up and running the U.K. division of EngNet, the South African office began to see declines. The company as a whole had good revenue with virtually zero costs, but it had hit a plateau in terms of bringing in new clients or continuing growth based on its directory subscription services.
Cooney’s solution: “About 2004, my brother joined me. He is a mechanical engineer, and he came on as a partner. Now my brother and I are equal partners in the South African office. He’s taken the reins and grown the revenue 20 times since coming on.”
While the business directory is still one of its strongest selling points across all three offices, Cooney found that competition within the North American market was stronger than any he had faced before. As a result, he decided that a “pivot” in strategy was required.
“The goal of the company remained the same: matching clients with customers in the engineering and industrial markets,” Cooney explains, “but as Google was becoming the 800-pound gorilla in the room, change was needed.
“Google traffic eventually rose to the top of referrals, so we had to contend with that. We work with hundreds of companies, and it’s always Google at number one when it comes to incoming referrals. So, if you do any type of directory advertising, you’ll see Google is number one, if you do AdWords, that’s number two, then Yahoo! and Bing. Then, down around number seven or eight, you’ll start to see directories come in,” he laments.
As a result of this trend, Cooney and EngNet began to put more emphasis on offering customers other solutions outside of the directory, eventually breaking the company into two additional parts: EngNet Design Group and Industry Tap.
“So, to pivot, we had to be SEO AdWords specialists. We were doing that already for our sites, but our clients were seeking Google traction. We began getting more and more requests asking if we could do that for them or do their web design.”
Adding Digital Marketing and Industry News
Today, in addition to maintaining an extensive directory for engineering professionals, EngNet offers a digital marketing division as well as an industry news site that incorporates social media. The company created Industry Tap out of a need for social media engagement, and the effort has brought in tens of thousands of “likes” and over a hundred thousand new followers.
However, EngNet was not as successful in gaining a social media following. Cooney explains, “What we tried is working with our large email database though our EngNet network, about 150,000 email addresses.
“By mistake, we included an article that took a different approach. Instead of talking about a product, we talked about how the product solved a problem. We wrote on that and we got three times the engagement compared to any other posts. So, we began to realize, if we write engaging stuff in a story format, we’re going to get much better results.”
After focusing on more premium content through the company’s newsletters, with an even split on advertising and content, EngNet saw engagement grow three to five times higher. As a result, Cooney decided to create and implement Industry Tap in order to tackle the social media world.
Today, Industry Tap is an EngNet property that concentrates on providing useful, entertaining and educational news to the engineering and industrial industries, currently boasting over 100,000 followers on social media.
“At different times of the year, I’m focusing on different things depending on the client,” describes Cooney. “Once we reach a certain level, we need to think about where we need to go next.
“A big thing that I’m involved with recently is tracking. We have a client that was getting 20 to 30 leads a month and they are now getting 280 to 300 leads a month as a result.”
Indeed, tracking is one of the things that has made EngNet as successful as it is in Charlotte and around the world. Cooney is so focused on providing results that he has taken to tracking not only hits on a website, but also tracking phone calls based on AdWord campaigns and beyond.
From there, he analyzes which leads really mean anything and which ones fall away. As a result, he and EngNet are able to offer meaningful statistics that display for clients exactly where return on investment is located.
Cooney grins, “These days, EngNet is focused more on lead generation, but more specifically, we’re concerned with quality lead generation, not just quantity. The company still respects Google’s ranking system, but we realize that Google is not the be-all and end-all of search engine marketing when it comes to bringing in new leads.”
He continues, “A big part of my passion is derived from the fact that I come from an engineering background. But mainly it’s connected with assisting people in finding the products and services they need. I love seeing the results, both for our clients and for their customers.
“I know that so many industrial clients have been burned, and it’s not because of the marketing agencies they use, but because those agencies don’t understand the industry. I do, and my experience and expertise allows EngNet to get the results our clients need and deserve.”
While EngNet faces larger competitors, Cooney feels that the company’s small size allows it to be more flexible with the rules and more nimble in adjusting to changing tides. The company’s directory is designed to be easy to navigate, and Cooney states that he is focused on building personal relationships with each client, whether they need EngNet’s directory, EngNet Design, or Industry Tap. Additionally, EngNet’s social media following is currently the largest when compared to larger engineering directories, and it’s growing each day.
EngNet 2.0 Content Marketing
“In the past, you’d promote yourself,” Cooney says, “but now we’re more focused on building brand loyalty through providing engaging and interesting content that matters to those in the industry. It’s all about solid content marketing, and that keeps clients interested and coming back. Our target clients are global, and while we focus on North America here in Charlotte, we offer the ability to geo-target across the globe. We try to reach everyone.”
While it’s Cooney’s view that Google will continue to dominate the search marketplace, he also believes that things are more streamlined now. In the past, it almost seemed as though the Internet was the Wild West of digital real estate; low costs and an abundant supply. Today, however, online marketers are finding that digital real estate is in short supply and costs continue to rise, all while competition is a larger issue. While this may present a problem to many online marketers, Cooney is confident.
“I think SEO remains important. Also, having real, quality content—having real, quality user engagement—is going to win the day. The times of winging it on your content are over. The guys who really put money into content, long-term, those guys are going to win,” says Cooney.
“Social media and e-commerce are growing tremendously as well, and user flow, making things totally streamlined…that’s what’s on the horizon. Every website, the easier you can make it, the more engaging it is, those are the things to focus on right now across every industry that has an online presence. There is going to be a lot of time spent analyzing in order to give a better user experience, and the companies that invest in that are the ones that are going to win.”
Adding to that, Cooney also feels that online tools will play a major role in changing the way online marketing works. Today, a large number of tools exists that offer users the ability to access very narrow parts of data, and these tools operate very effectively and efficiently.
“There are so many tools available today for checking backlinks or for putting in a simple URL and seeing who links to you and the power of those links. I find it interesting, but not all companies are using such tools, and they are only as good as how you use them,” continues Cooney.
“The cloud is also important as it is opening up communication across a wide variety of marketing channels in different industries. And this applies to small and enterprise businesses as small businesses today now have access to enterprise-level tools.”
However, the potential for problems in technology exists as Cooney mentions the plateau effect, a situation through which a client may become conditioned to seeing consistent growth through digital means.
“Clients can become accustomed to growth in positions and traffic,” he says, “but we want to be measured by leads and sales, not gimmicks. We want to be measured by amount of dollars we bring through the door.
“I see us growing, and what we do isn’t going to change: we’re connecting industrial and engineering suppliers with customers. However, what is going to change is how we do that.
“We’re using more premium content. We’re also taking a look at breaking into specialized fields,” he says. “At the end of the day, we’re going to make the process clearer so that clients can see the benefit that is being received from our services, and as time goes on, we expect to provide clients with technologies that are even more transparent, assisting in growth not only to EngNet, but also to those who rely on our team.”
Last December marked the first anniversary of the merger of American Airlines and US Airways, which created holding company American Airlines Group, Inc. (NASDAQ: AAL), and made American Airlines the largest airline in the world.
When the merger was first announced in 2013, many in Charlotte saw it as a benefit to the area, but others had concerns about the future of Charlotte Douglas International Airport and its role in the post-merger American network.
Charlotte Douglas, which serves more than 39 million passengers annually, is widely considered a strategic asset in attracting and maintaining businesses for the area and figures prominently in local leaders’ vision for making Charlotte a future global hub of trade.
Prior to the merger, US Airways operated 90 percent of daily flights in and out of Charlotte Douglas, with Charlotte Douglas as its largest hub.
As the integration of the two airlines progresses, the US Airways brand is eventually absorbed and rolled into American, operating 90 percent of the airport’s daily flights, with Charlotte Douglas as its second largest hub behind Dallas/Fort Worth.
So a year into it, how is the merger going?
According to Chuck Allen, American’s managing director of government affairs, “It’s been a busy year. A lot has been accomplished, but this is a multi-year undertaking and we have a busy year coming up too.”
An early accomplishment of the past year was linking the two airlines’ route networks. In January 2014 the airlines began code sharing, placing their designator codes and selling tickets on each others’ flights.
“We’ve created the largest code share in the industry,” comments Allen. “This gives customers access to the combined network.”
The combining of the two airlines’ mostly complementary rather than competitive routes has created a substantial network. With the inclusion of the wholly-owned and third-party regional carriers operating as American Eagle and US Airways Express, the new network consists of nearly 6,700 flights per day to 339 destinations in 56 countries from its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, D.C.
And while the airlines’ frequent flyer programs have not yet combined, customers can currently earn and redeem miles on flights operated by either airline and have reciprocal access to clubs and upgrades.
Another past year milestone is the consolidation of duplicative operations. “We’ve combined operations in 82 different cities,” says Allen. “That allows us to be more efficient in the cities in which we’re co-located.”
When asked how that affects the airlines’ Charlotte labor force, Allen responds, “We’ve co-located ticket counters and absorbed those employees so there haven’t been any employment reductions.
“Right now, American employs over 10,000 in Charlotte. That will remain fairly consistent. Obviously, we look for additional flight opportunities out of Charlotte and that might drive future employee hirings.
“Companywide, we’ve been hiring people—more than 650 new pilots and over 2,000 flight attendants this year.”
Going for Great
In addition to new employees, American is also acquiring new aircraft. They took delivery of nearly 100 new aircraft in 2014, giving the airline an average aircraft age of 12.3 years and the distinction of having the youngest fleet of any U.S.-based network carrier. Orders of new aircraft continue with 112 expected in 2015 and 84 in 2016.
“We’re taking delivery of a new airplane and retiring an older one about every four days,” says Allen. “These new aircraft are passenger-friendly and more fuel efficient than the aircraft they’re replacing.”
The company reports orders of the Airbus A320 family, A350-900s, Boeing 737 MAX, 777-300ERs and will receive its first Boeing 787 Dreamliner this month.
In addition to new aircraft, American intends upgrades for much of its existing fleet. Refurbished interiors and new seats are planned for many aircraft including lie-flat seats in Business Class on both the 767-300s and 757s. The 93 A319s of the legacy US Airways’ fleet will also receive new seats and 24 main cabin seats offering extra space.
Improvements to in-flight entertainment and connectivity are also planned. By the end of 2016, all of the airline’s 777-200s will be retrofitted with in-seat entertainment systems and a walk-up bar.
Customers will also have an easier time powering devices in-flight. New 737s, nearly all new A321s as well as retrofitted A319s will have power ports in every row. And all new wide body deliveries, including 777-300ERs and 787s will have power ports at each seat.
Satellite-based internet access on all 787s, 777s, A330s and retrofitted 767-300s and 757s will allow connectivity on international flights.
The aircraft upgrades are just part of $2 billion in customer improvements American recently announced. The airlines’ nine hubs, including Charlotte, will also receive capital improvements.
Updated lobby designs and additional newer, faster and more reliable kiosks will streamline the check-in process. New worktables with 12 power outlets each and seating for eight will allow travelers to charge up devices near the gates in hub and gateway airports.
The company’s Admirals Clubs will also get a facelift with refurbished restrooms and shower facilities, improved technology, and expanded and healthier food options.
“Now that we have the network to complete globally, we’re going to deliver a product that’s better than our competitors,” explains American’s Chairman and CEO Doug Parker. “Refreshed cabins and clubs, modernized ticket counters, improved technology and new aircraft are further examples of how American is ‘going for great’—providing our outstanding team members the tools they need to deliver a great experience for our customers.”
The announcement of the $2 billion airline improvements comes in the wake of a banner financial year for American. Third quarter 2014 net profits, excluding net special charges, was a record $1.2 billion, an increase of 59 percent over 2013 third quarter results. Third quarter 2014 GAAP net profit was $942 million, the largest in any quarter in the history of the airline.
The company also declared its first dividend since 1980, returning $185 million to shareholders through payment of $72 million in quarterly dividends and the repurchase of $113 million of common stock.
“Our chairman has said the fourth quarter will also be a record fourth quarter so we’re going to have a record year of profitability for the company,” adds Allen.
While the challenges of the first year of the merger appear to be successfully met, the airline admits 2015 is a year of “heavy lifts.”
Behind the scenes, the company is working on getting a single operating certificate from the Federal Aviation Administration (FAA). “We have to combine the American and US Airways operations into one single book of operating procedures and the FAA must bless that,” explains Allen. “It’s extensive and very detailed but it should be completed by the summer of 2015.”
By the second quarter, American plans on merging the two carriers’ frequent flier programs. Mileage totals will combine for those having active balances in both AAdvantage and Dividend miles programs. And for the time being, American will continue to award points based on miles flown rather than on ticket cost, a change recently made to frequent flyer programs at Delta and United.
One of the “heavier lifts” of the upcoming year is the combination of the two carriers’ reservation systems. “This integration is behind the scenes but can be very visible to the public if we don’t do it right,” says Allen.
American has cause for concern. The integration of US Airways’ and America West’s reservation system a year and a half after their 2005 merger caused serious disruption at several airports. Combining the reservation systems of United and Continental was similarly problematic in 2012.
But the heaviest lift of all might be the Herculean effort of unifying 100,000 employees into a single workforce.
After a narrow loss last November and subsequent binding arbitration, American and the Association of Professional Flight Attendants reached an agreement worth $112 million in late December that would cover the 24,000 flight attendants of American and US Airways.
Efforts continue with pilots, passenger service agents, mechanics and ground workers. Not surprisingly, in a past year of record profits for American, profit-sharing has become a source of contention. While several other airlines have employee profit-sharing, American’s management prefers fixed pay increases. Negotiations continue.
“We are laser-focused on all the 2015 issues,” Allen states, “so if there are any surprises we can deal with them immediately. Obviously, our goal is to make sure there are no surprises.”
So a year in, what has the merger meant for service out of Charlotte?
“Charlotte has exceeded our expectations for a long time,” Allen states. “It’s a great operation and now it’s the second largest hub in the world’s largest airline. We continue to look at opportunities, but Charlotte will continue as a terrific East Coast domestic hub for us.
“We’ve got a lot of service out of Charlotte to the Caribbean year round. We’re now doing daily doubles to London and we’ll continue to fly to Frankfurt. We’ll also continue to do top destinations in Europe in the summertime.
“Since the merger, we’ve added a number of new destinations in the Midwest like Tulsa and Oklahoma City.”
When asked about the Charlotte Regional Intermodal Facility, which is located at the airport and enhances global trade for the area by facilitating cargo transfers among airlines, trucks and railroads, Allen responds positively. “It’s a great addition to Charlotte,” says Allen. “It provides opportunities that most airports in the country don’t have. We’re very pleased it’s here.
“The new, larger network provides more opportunity on the cargo side in Charlotte, but cargo operations in this country are predominantly on wide body aircraft. As primarily a domestic hub, we fly very few wide bodies into Charlotte currently. Of course, the more wide bodies we have in the future, the greater our opportunities are.”
While opportunities certainly exist, several current issues have the potential to impact the future of American at Charlotte Douglas.
The airline’s 30-year master lease with the airport, negotiated under legacy US Airways, expires in 2016. “I think we’re going to be partners for a long time,” Allen says on the topic. “We have a substantial investment here. The Charlotte operation is one of the best in the country. The airport is the most efficient in the world.”
In fact, Charlotte Douglas’ historically low operating cost is a major part of its attraction for American or any airline and one of the reasons why there is so much at stake in the ongoing battle over who controls the airport.
A judge’s ruling last October allows the city to maintain control of the airport and blocks an independent commission favored by state legislators from taking over. So far, the FAA has declined to weigh in on the decision.
Expressing confidence in the current management at Charlotte Douglas, American Airlines remains neutral about who should control Charlotte Douglas. “Our position hasn’t changed,” says Allen. “We remain agnostic as to who runs the airport.
“We just want to make sure that it’s run in the most efficient and cost-effective manner like it has for years. Management that keeps the airport as a low cost, efficient operation is what we want to see in Charlotte.”
That low cost could soon be threatened, in part, not by airport management but by the North Carolina General Assembly.
In 2006, North Carolina lawmakers approved a cap that refunded airlines any fuel taxes paid in the state in excess of $2.5 million. The cap, with an estimated value of $10 million of revenue to the state, is set to expire January 1, 2016. American is the largest beneficiary of the cap.
“Taxes are an important factor in the cost of an operation,” says Allen. “Certainly, you want to put your assets where they have the greatest return for you. Virginia has a very low tax rate on fuel, as does South Carolina, and Texas has no tax on fuel.
“The tax cap is certainly beneficial to American and if it were to sunset, as it’s scheduled to do at the end of the year, without being continued or mitigated in some form, then that will change the cost dynamics in North Carolina and Charlotte. The fuel tax is the number one legislative issue we’ll be focused on in North Carolina for 2015.”
According to a recent Tax Foundation blog, Illinois has the highest total tax rates for commercial jet fuel, followed by California and Connecticut. North Carolina is 20th on the list. Neighbors Virginia and South Carolina ranked 38th and 42nd, respectively.
Texas, where American is headquartered and where it has its largest hub, doesn’t tax jet fuel. Neither do Delaware and Ohio.
Airlines serving North Carolina are lobbying state lawmakers to extend the cap or even exempt the jet fuel sales tax completely. They estimate that if neither step is taken, North Carolina will be the fifth costliest state for the purchase of jet fuel.
Despite upcoming challenges, Allen says American “will remain fully engaged in the Charlotte business community at multiple levels and in multiple organizations.”
We’re very interested in the growth of Charlotte,” Allen continues. “That’s why we are members of the Charlotte Chamber of Commerce and Charlotte Regional Partnership. We think the Charlotte area has a lot of opportunity and we’re committed to making Charlotte grow.”
Just a short drive south of Charlotte, in Rock Hill, S.C., is the headquarters of a global company whose technology could change everything—from the way things are manufactured, to how things are designed and prototyped, to ultimately who and what is being produced. It will touch every individual in terms of what they can individually produce, how they will undergo surgery, even what they eat.
The light-filled lobby of 3D Systems (NYSE: DDD) could be the lobby of any large company, except for the display of objects. To the left is a fancifully intricate guitar, a teapot, a woman’s shoe and beautifully detailed dollhouse furniture. To the right is a delicate scoliosis brace, a helicopter part and farther back, a car engine block casting pattern. All of the items were created on a 3D Systems’ 3D printer.
Assembling the Technology
3D Systems pioneered 3D printing under the leadership of Chuck Hull, the inventor and patent-holder of the first stereolithography (SLA) 3D printer in 1983. Hull went on to cofound 3D Systems in Valencia, Calif., in 1986.
Hull’s 3D printer enabled engineers for the first time to instantly create functional parts from digital designs, substantially reducing the time it took to prototype parts, which until then had been done using costly and lengthy traditional manufacturing methods. This greatly accelerated product development and compressed time to market.
The first adopters of the technology were America’s carmakers, who saw this capability as a chance to speed up their innovation cycle and reclaim a competitive edge against the rise of cheaper and nimbler foreign imports.
But, despite their obvious usefulness, early 3D printers were complex and costly and therefore limited to deep-pocketed corporations, such as Detroit’s automakers, with the financial and human resources to take advantage of the technology.
However, advances in 3D printing and its associated materials and software have pushed prices sharply lower and improved the quality and usability of 3D printers. This, in turn, has opened up new possibilities across a broad range of industries, including transportation, health care and consumer products. At the same time, thanks to expanding capabilities of 3D printers, companies have begun to use 3D printers to directly manufacture end-use parts.
In 2003, Avi Reichental was appointed president and CEO of 3D Systems. Prior to joining 3D Systems, Reichental served for more than 22 years in various senior executive positions with Sealed Air Corporation. Both Reichental and Hull are listed among the top 20 most influential people in rapid technologies by TCT Magazine. Hull remains an active member of 3D Systems’ board and serves as the company’s CTO.
In 2007, 3D Systems relocated its headquarters to Rock Hill, S.C., in an effort to support an ambitious growth strategy. Over the past few years, the company has implemented a series of well-executed organic and acquisitive growth programs. These investments have helped 3D Systems consolidate key 3D printing technology building blocks, create a one-stop-shop covering the entire content-to-print supply chain, and gain valuable first mover advantage in key areas like health care and direct metal printing.
What differentiates 3D Systems from others, Reichental says, is its ability to address a broad range of design-to-manufacturing applications. In fact, today, 3D Systems is the only company to commercially provide 3D printers in all seven print engines and offer over 120 functional print materials that are complemented by powerful on-demand print services and software specifically tailored for users in each of its verticals.
Traded on the New York Stock Exchange (DDD), 3D Systems today employs over 2,000 worldwide, with more than 300 located in Rock Hill. It has operations throughout the U.S., Europe and the Asia-Pacific region. It is a global leader providing comprehensive 3D design-to-manufacturing solutions including 3D printers, print materials and cloud-sourced custom parts with a $4 billion market cap.
With the goal of pioneering 3D printing for everyone, the company is forward-thinking and future-focused. And with its strong advanced manufacturing customer base, it truly embodies its slogan, “Manufacturing the Future.”
A Disruptive Technology
3D printing is considered a “disruptive” technology in as much as it has the potential to revolutionize manufacturing and even effect societal change. According to Reichental, surprisingly, some of that change may make our future more like our past.
At its heart, 3D printing makes things. It’s an additive manufacturing process that creates three dimensional objects by building them, layer by thin, successive layer out of a variety of materials—over one hundred now and still counting—but usually from plastics, nylon and even metal.
The making of things is part of why Reichental connects 3D printing with our pre-Industrial Revolution heritage, but it’s the ability of 3D printing for mass customization that strikes a chord with Reichental.
“My grandfather was a cobbler,” Reichental says. “Back in the day, he made custom-made shoes. I inherited his love for making, except that it doesn’t exist much anymore. While the Industrial Revolution enabled amazing advancements for mankind, it also atrophied our craftsmanship skills and eradicated hyper local manufacturing, leaving us with cheap, uniform and commoditized goods that churn off assembly lines half a world away.
“Think about the products we consume every day. Almost all of them were designed to be mass-produced so that producers could achieve economies of scale, making them more readily available to a wider number of people. We call that ‘design for manufacturing,’ but in reality, it is ‘design for manufacturing constraints’ because mass-produced goods inevitably compromise performance and personalization for production efficiency, cost and uniformity.
“3D printing is turning this traditional approach to manufacturing on its head. A 3D printer requires no tooling or set-up so there are no economies of scale to be achieved from mass production. Per-part costs are the same whether you are producing a batch of one or one million, and this gives companies the opportunity (and the incentive) to personalize each product to an individual consumer’s needs.
“We are at the dawn of the mass customization era where products you buy—from clothing to consumer electronics to medical devices—will be tailored to your individual specifications.
“If this sounds futuristic, consider this,” continues Reichental. “Currently, Align Technology, the maker of Invisalign clear orthodontic braces, is using 3D printing to produce more than 20 million one-of-a-kind aligners each year. And almost every in-the-ear hearing aid today is 3D printed to perfectly fit each wearer’s ear canal.”
One salient example of mass customization is 3D Systems’ work on a continuous high speed manufacturing system that can print 50 times faster than today’s technology and produce functional full-color multi-material parts for automotive, footwear, toys and consumer electronics companies requiring continuous high speed manufacturing.
Manufacturing the Future
Automobile manufacturers were early adopters of Hull’s technology, discovering that 3D printing substantially compressed their time to market with new cars, giving them a meaningful market advantage.
3D printing remains a mainstay in automobile manufacturing. General Motors (GM) uses several 3D Systems’ technologies in their Rapid Prototype Department, allowing quick iteration of parts with no tooling and permitting engineers and designers to visualize a part or use it for a mock up or small batch production.
GM considers the 3D Systems-powered design and manufacturing as a strategic investment, citing the quality and fidelity of the parts as well as the speed and labor cost savings involved in making them.
Aerospace companies were also early adapters of 3D printing, and rely on the technology today for everything from prototyping to manufacturing end-use parts. The Boeing Company, for example, makes use of 3D Systems’ Selective Laser Sintering (SLS) printers to design, test and manufacture parts for its air vehicle products that include the AH-64D Apache Longbow helicopter.
“If I were to add up all the tooling costs we’ve eliminated, all the parts we’ve made, and all the man-hours we’ve saved by using our SLS system to create prototypes and parts, I could easily say we’ve saved enough to pay for the system—and potentially even a second machine,” says Jerry Clark, manager of the Air Vehicle Configuration Design, Integration and Rapid Development Department of Boeing.
To further assist manufacturers, large and small, 3D Systems offers Quickparts, the company’s on-demand parts service. Quickparts provides quick-turn custom manufacturing parts, offering services throughout the entire development of a product, from rapid prototyping and pre-production, to tooling and production.
And while Quickparts is a natural choice for manufacturing companies like Siemens and Whirlpool, Quickparts’ speedy turnaround and cost-effectiveness appeals to audiences outside of manufacturing as well. Using 3D Systems’ SLS printing technology, Quickparts printed the main helmet bases and structures of the white helmets worn by George Clooney and Sandra Bullock in the Academy Award-winning film “Gravity.”
Quickparts’ ability to manufacture whatever product a company needs anywhere—a movie prop one day, a functional car part the next—illustrates how 3D printing is already changing the face of manufacturing.
“3D printing is quickly turning conventional manufacturing wisdom on its head, and in particular challenges the notion of economy of scale,” Reichental maintains. “Because 3D printing eliminates the need for expensive tooling, set-ups and change-overs, companies are free to onshore and relocalize their manufacturing closer to their marketplaces.
“This form of distributed/localized manufacturing can substantially reduce freight costs and the associated environmental impacts, and provide the flexibility for unlimited product segmentation to cater to local taste and demand.
“A shoe company selling 3D printed sneakers might market a sneaker line throughout the U.S., but print it with more rugged winter-ready treads in its Oregon production facility and flatter, smoother treads in its Florida facility.
“The relocalization of manufacturing is not just about manufacturing a single line of products close to the consumer, but also about creating local fulfillment centers, where any number of companies or consumers can have products manufactured on demand.
“And parts can be literally teleported (specs shared digitally and manufacture done locally). Anywhere, anytime. And because this is all done on demand, there is no need for inventory!”
But hyperlocalization of manufacturing and on-demand inventory is only part of the 3D printing story. “With a 3D printer, complexity is free,” explains Reichental. “A 3D printer does not care if it makes the most rudimentary geometry or the most complex. There is neither barrier nor penalty for complexity.
“With 3D printing, designers are uninhibited by yesterday’s manufacturing constraints and are free to produce whatever they can dream. That has powerful implications for sectors like aerospace, automotive and health care, where complex design is essential to unlocking better performance and durability.”
The Health Care Digital Thread
If health care is not the first industry that comes to mind when you think of 3D printing, 3D Systems’ medical applications could change that.
“Personalized medical devices are among the most exciting applications today. And they are arguably the most impactful,” says Reichental. “Already, we are able to use CT/CBCT scan data from individual patients to create patient-specific dental restorations and anatomical models, custom surgical guides, implantable devices, exoskeletons, hearing aids, prosthetics, and braces for scoliosis and other applications. And that’s just to name a few.
“Beyond that, we’re also able to use the same patient-specific data to provide surgeons with accurate planning models and virtual training and operating platforms for use in some of the most complex surgeries performed today.”
3D Systems’ Virtual Surgical Planning (VSP) technology allows surgeons to work with 3D Systems’ Medical Modeling experts to create a surgical plan and print 3D study and practice models as well as actual surgical instruments and implantable devices, providing them with tools and guidance to virtually plan and physically practice and perform critical steps of an operation before a patient ever steps into the operating room and while the patient undergoes the actual procedure.
In a recent case, a surgeon successfully used the VSP technology to assist in correcting the undersized jaw of a one-month-old, allowing her to properly breathe. This saved the child from enduring a tracheostomy until the age of six when this surgery is traditionally performed.
“This integrated, personalized approach to health care is what we refer to as ‘the digital thread’,” explains Reichental, “and it is revolutionizing health care as we know it. In 10 years, I believe we will look back on medical procedures that don’t use a 3D digital thread as crude.”
The Democratization of 3D Printing
While many industries have been using 3D printing to strategic advantage for decades, Reichental is a strong champion for democratization of the technology for use by everyone.
“3D printing is an exponential technology,” he says. “It is becoming faster, cheaper and easier to use at an exponential rate. For its first few decades, 3D printing was complex and expensive and, as such, was only available to deep-pocketed corporations.
“But the costs of 3D printing have fallen so much that this technology is finally opening to the consumer for home use. This year, we introduced plug-and-play consumer 3D printers for under $1,000, which are supported by a vibrant ecosystem of design tools and creative communities that allow users to effortlessly create and share content.”
3D Systems’ Cube 3 printer offers dual color printing, touch screen controls and printing direct from your mobile device. Ideal for hobbyists or anyone interested in 3D printing things for use and wear, the Cube is enhanced and supported by 3D Systems’ Cubify.com, an online platform that enables users to share designs, download free designs, order printed products or use Cubify tools and apps to design and create objects on their home 3D printer. Cubify.com also offers a Cloud Printing service that can print and deliver a user’s specific design to their doorstep in days.
The company also introduced a line of Sense 3D physical photography devices priced under $500 that can digitally capture objects and quickly turn them into 3D printable files.
To further democratize the technology, 3D Systems is actively involved in advancing digital literacy in grades K-12 S.T.E.A.M. education with its First Robotics, Level Up Village and M.21 Lab education programs available to schools, libraries and museums.
“Kids just get it, instinctively and instantly,” says Reichental. “They are at home with tech and immediately understand how to bridge the virtual with the actual using our 3D scanning devices to digitize their environment. Then they begin to create, customize and bring their ideas to life.
“The sooner kids are exposed to this digital literacy, the faster they master tomorrow’s competitive skills.
“But not every kid wants to learn CAD, nor should they have to, so we are developing intuitive, gamified apps that make creating content fun and coloring-book simple.”
To further its goal of ease of use and enhance the design experience, this year the company debuted the Touch haptic 3D stylus, which gives instant force feedback that mimics physical sculpting and transforms 3D modeling to a simple, easy sculpting experience for users.
Other new 3D Systems’ product offerings include the Ekocycle Cube 3D printer which uses recycled post consumer plastic such as from discarded plastic water or soda bottles and the ProX400, a direct-metal printer for large scale industrial manufacturing use, unveiled at EuroMold 2014 last month.
Although not yet commercially available, 3D Systems also debuted a 3D printer that can print in sugar or chocolate at the Consumer Electronic Show 2014. Think wedding-cake toppers or personalized candies—the uses of this technology are only limited by the imagination.
Competitive Marketplace Fuels Innovation
While ever-expanding applications continue to grow the 3D printing market, it remains a highly competitive industry. Stratasys Ltd. is a large player and Hewlett Packard just announced they will enter the 3D printing field. Reichental comments that he finds HP’s announcement “enormously validating to us.”
In the meantime, new products and innovation continue to fuel growth and revenue for 3D Systems. The company expects annual revenue for 2014 to be in the range of $680 million to $720 million, and the company’s continuing affinity for acquisitions is expected to better its share of the 3D printing market, especially in key areas of health care and aerospace.
And while it expands its global network, 3D Systems is also renewing its commitment to the Charlotte region with the lease of a 200,000-square-foot manufacturing and distribution center near its existing headquarters in Rock Hill.
“When we decided to move our global headquarters from California in 2007, the Charlotte region was the obvious destination for a high-tech, high-growth business like ours,” attests Reichental. “While selecting a vibrant, pro-business destination was a major part of that decision, we were equally looking for a community in which entrepreneurial thinking thrives.
“With a long list of business success stories, a talented labor market and world class infrastructure, the Charlotte region had all the right ingredients for us to develop and scale our business. The city’s location—balanced between Asia and Europe—also made it much easier to manage our expanding global operations in real time.
“Since our arrival, we have enjoyed a terrific and constructive relationship with the South Carolina Department of Commerce. Our collaboration has already resulted in the creation of hundreds of jobs and is built on the shared belief that building a center of excellence in advanced manufacturing can bring strong benefits to this region.
“For more than 30 years, our success at 3D Systems has come down to the effectiveness of our technology,” Reichental continues. “We invented 3D printing, advanced it and continue to lead the democratization of access to this transformative technology for the benefit of manufacturers, health care providers, consumers and educators.
“From the home, to the school, to the office, to the kitchen, this technology is going to change everything; from how we design, to how we make, how we learn, how we live, how we eat, how we stay healthy, how we share. Everything.”
3D printing’s potential to revolutionize our lives is quickly becoming apparent, and 3D Systems is poised to be a major force helping shape the new order of things.
Forbes has ranked 3D Systems No. 13 among the Most Innovative Growth Companies with a market capital less than $10 billion, and just recently No. 43 among America’s Best Small Companies in 2014.
Planning around life’s unknowns can be difficult to explain and do and, often, even to think about. But a single life event such as an accident, storm, disability, or death can suddenly change the direction of an individual’s, family’s, or company’s path.
Father-and-son team Henry B. Cantrell, CLU and John F. Cantrell, CIC, CEO and president, respectively, and co-owners of H. B. Cantrell & Co., spend much of their time helping people protect themselves, their loved ones, and/or their businesses and property against the unexpected.
“There’s no problem until there’s a problem,” says Henry. “We help potential clients understand the damage they may sustain if a certain occurrence takes place with life, property or business. When there is a problem, we want to make sure the solutions are there.”
“We take a complicated subject and make it easier for people to understand,” continues John. “While clients may not want to talk about such things, we can help them contemplate unforeseen circumstances and navigate through what is needed, presenting solutions that make sense—making it more palatable.”
On the other side of an incident causing loss or damage, Cantrell is there to help clients through a bad situation and make it less burdensome by the protections that were put in place. “Our product for over 35 years, now, is peace of mind,” says John.
Cantrell Insurance is regarded as an “all lines insurance broker,” which means that they work with a broad range of insurance products in the areas of auto, home, business, life and disability. Each partner is fully licensed for both life and property/casualty insurances.
“Our philosophy is to find the best product for the client and then service that client for the long term,” says John. One of the ways they do that is by working with a large and varied list of reputable insurance carriers that consistently offer competitive rates and excellent claims response.
“The selection of insurance carrier is very important,” comments Henry. “Everyone wants the most competitive price and everyone, after the fact, wants the best possible outcome. We want to provide the personal aspect to the client while dealing with the carrier. I am available personally 24/7 with the exception of when I am asleep,” laughs Henry. “I want to know if there are problems.”
Henry balks at the idea of “selling” insurance. “We do not sell—I am not a salesman,” he states emphatically.
“I want to evaluate and show you where you’re at and see if I can be of assistance. I always come away feeling good if I’ve made you aware and educated you to the risks and the available protection.”
Most clients have a need for more than one type of insurance, according to Henry. “I work to build a relationship so that when a client thinks about insurance, they think about us.”
Sixty-five to 70 percent of the company’s book of business is in property/casualty. Commercial versus personal business is about 50/50. “This diversification is intentional and is what helped us through the economic downturn,” says Henry.
The company is not normally involved in group medical and employee benefit plans. “For my first 10 years, 30 percent of my income came from medical,” continues Henry, “but then the market changed and the customer was not happy with what was occurring. I can’t be dealing with a product where the customer is not happy, so I redirected into other areas. I didn’t want to be the communicator that gets killed.”
Cantrell focuses on the Charlotte and surrounding area, but handles business as their clients’ needs demand in other areas. “Working with our clients is more about relationships than geography,” explains John. “If clients have business in other areas, we will follow that.”
The business started out in the South Park area of Charlotte and then was moved to East Seventh Street just a few doors away from where they are now. The purchase of an insurance company named Bowers changed the dynamics of the company and doubled it in size. Outgrowing their space, the company moved into its current offices in 1998.
Assessing Risk Carefully
Consulting over the unknown can be risky business. And in an industry where competitive pricing is strongly demanded, it is all the more challenging to manage risks effectively.
“It is important to evaluate risk carefully,” says Henry. “In any situation, we look at the history of claims, accidents, behavior, activities and habits.”
“We are taking great latitude with the carriers,” explains John. “Carriers look at loss ratios. They look at agents based on the business they write and whether or not these agents help them to become profitable. We can write a contract that can cost them a million dollars tomorrow, so they evaluate us based on our ability.”
Cantrell helps their clients identify, measure and reduce risks for their business, their personal property and their lives. In today’s busy world, people don’t necessarily stop and think about things and the risk they may be exposing themselves to.
John explains, “At a recent business insurance review, we discovered that the client had purchased another business and forgotten to call us. It’s important to think about how what you do might impact your level of risk.”
The process for evaluating a person’s or company’s level of risk is called front-end underwriting. The agent attempts to evaluate the situation in areas that the carriers cannot see. This process is largely responsible for the management of risk and the ultimate success of the insurance industry in terms of financial stability and profitability, according to the Cantrells.
Henry and John express frustration over some companies that tend to operate on the back end, totally on price. These companies, they say, sell a lot of low-priced policies to high-risk customers, who often come away underinsured.
“Due to the widespread appeal of these types of companies and their advertising focused on price only, much of the public has begun to see insurance as a commodity rather than a service,” says John. “You can’t really commoditize it—you can’t take away the fact that people are emotionally tied to their homes and businesses. When something goes wrong, you want to sit down with someone you know and work through it,” says John. “There is still a place at the table for the local guy who maintains a relationship.”
“You’re not really giving them the lowest price by giving them the lowest coverage,” adds Henry. “Those limits are often not sufficient to cover them or another person injured (in the case of an automobile accident). We want to make sure that clients are sufficiently covered. We explain the limits so they can make an educated choice.”
Most of the Cantrells’ clientele are generated by referrals from other personal and commercial business. Proof of insurance is often required by financial lending institutions, state governments, and even discerning customers. Regulation is handled on a state-by-state basis.
The Cantrells are proud of the long-term status of their employees, and attributes longevity at the company to its philosophy, flexibility and family-friendly orientation. Most their employees have been with them for more than 10 years.
“Most of us spend more time at work than with our family,” says John. “We treat employees like family with flexible working hours and time to do things.”
The company also offers fitness programs and lunch-and-learn sessions on parenting, health, nutrition and other topics. Cantrell offers up an unusual order of priorities for its employees.
“We believe your faith is first; family takes priority over your job; then your job,” says Henry. “The reason is simple. We want employees to work in a moral manner and, for most people, this is guided by their faith, whatever that may be. When people see how you work, they see who you are.”
The company emphasizes teamwork, a concept that they had opportunity to test a number of years ago. “Dad had double bypass heart surgery,” remembers John. “But the business didn’t miss a beat, the company progressed and he was able to heal. The team effort carried things forward.”
Still, the biggest challenge is regarding staff, according to John. “It takes time to build and train staff. It’s a complex business and takes time to put the right people together.
Henry graduated from East Carolina University in 1965 with a degree in business. After working for a brief period of time with Pure Oil Company, he was drafted into military service where he attended Officer Candidate School and graduated as a distinguished cadet. He ended up serving in Germany as a company commander and was awarded the Army Commendation Medal for his service.
Returning to the company, now Union 76, he moved between Richmond, Raleigh and Charlotte. While in Raleigh, he realized that the corporate life was not a good fit.
He entered the insurance business in 1973 with Travelers Insurance Company. “It was basically a three-year salaried training program. They provided zero leads; everything I had was what I could come up, with but they gave me facilities and a cushion to get started.”
From there Henry started his own company. “I wanted to have a job that would allow me to be of service and allow me to be rewarded based on my ability to be of service to people. I’ve had a philosophy of customer service and being empathetic with whom you’re dealing with.”
In a deliberate move, Henry let go of the businesses in 1985, entering into a three-year employment contract with what was then First Union National Bank.
“I did that for two reasons. It gave me opportunity to receive a payment that would provide some security for the future and also to see how the big boys did it. What I came away is that they didn’t do it as good as I was already doing it. So after three years and two months I returned to being an independent broker.”
John joined his Dad in the business after graduating from East Carolina University in 1992 with a degree in finance.
Serious about their role in the community, the Cantrells have a long family history of civic involvement including Rotary Club and the Charlotte Chamber of Commerce. John, an Eagle Scout himself, is an assistant scout master at Troop 11 meeting at Providence United Methodist Church.
The pair are active at Covenant Presbyterian Church and offer support for breast and brain cancer research, Samaritan’s Feet, and the YMCA. John enjoys athletics and has completed several triathlons including an Ironman Triathalon. “Being a part of the community is an extension of who we are; what our business is,” says John.
Henry lives in Charlotte with his wife. His younger son is a 19-year veteran of the Charlotte Mecklenburg Police Department. John lives with his wife, Ashley, who is a neo-natal intensive care nurse, and his three children, ages 15, 14, and 12.
Henry and John have an obvious bond and rapport—they enjoy and appreciate the opportunity to work together. “We get to see each other every day and talk whenever we can,” says Henry. “I don’t try to ‘big-dog’ and I don’t dictate. If you look on my card, you don’t see a title. That’s the way we manage the whole office.”
“I feel blessed,” says John. “I like that there is opportunity to provide a legacy to my children in that they could have a legitimate place to make a living. Plus, I get to go home every night. Lots of people have to get on an airplane and stay in a hotel to have a successful career in sales. I have been able to participate in my kids’ lives. It’s been good.”
Asked about potential for retirement, Henry states that he has begun to work fewer days and hours but is still quite active in the business. “I want to deal with those customers who want to deal with me for as long as I am able,” he says, his commitment and determination apparent.
The cost of day care now rivals the price tag for college tuition in some parts of the U.S., according to a recent Child Care Aware of America report. Day care expenses are overshadowing the amount a family spends on housing, food and transportation.
The eye-popping figures include $16,549, which is how much parents had to pay per year on average for infant day care in Massachusetts in 2013, according to the report. Or $12,280, which was the price tag for a year of day care for a 4-year-old in New York.
In fact, the average annual cost for infant day care was higher than a year’s tuition at a four-year public college in 30 states and the District of Columbia. For parents of two children, full time day care is the highest single household expense in the Northeast, Midwest and South.
And the trend of increasing cost and increasing importance is only escalating. As the report points out, “The economic recovery will greatly benefit the day care industry. As parents and guardians, particularly females, rejoin the workforce, demand for day care services will grow. Additionally, expected increases in disposable income will allow families to spend more on child care, including high-value services such as early education programs.”
Few people are more familiar with the impact of an early and high quality preschool education than Bill and Amy Strickland, owner-operators of two locations of The Goddard School. The pair, hailing from the Southeast themselves, opened their first private preschool in Fort Mill in 2009, and a second in Rock Hill in 2013. At present, there are 10 Goddard School franchises throughout the greater Charlotte region.
“Goddard Systems, Inc. is the franchisor,” explains Bill Strickland, “and the interesting thing is, the guy who started the company—Tony Martino—was the same one that started Maaco.”
Anthony A. Martino, a well known and celebrated guru in the franchising world, took companies from the ground up and made them national brands. He was the force behind the Aamco (an acronym of his initials) Transmissions enterprise which he started up and sold, and subsequently Maaco Enterprises which he built into a 450-franchise collision repair and auto painting retail network.
Along the way he developed a franchise of tune-up shops he sold to Meineke, and also the early development child care franchise called The Goddard School.
The Goddard School concept came about in 1988, when Martino was approached by a former associate with an idea for providing upscale child care with degreed teachers at every level, he thought it could and should be duplicated. Based on an educational philosophy that emphasizes nurturing the whole child, the Goddard School focuses on emotional, social, intellectual and physical development as well as standard educational goals for children six weeks to six years.
Today, the franchise has grown to over 400 child care centers with more than 50,000 students in 35 states. It has been ranked the No. 1 childcare franchise for the last 13 years by Entrepreneur magazine, and in the Top 200 Franchise Systems (worldwide sales) by Franchise Times for the eighth year.
The Goddard School Attraction
“The Goddard Schools rely on the franchise model of offering a nurturing environment, advocating genuine learning, and collaboration with parents to help children reach their fullest potential,” says Bill. You can walk into any Goddard School and feel the uncommon level of quality, value and education—consistently.
“We’re both owner-operators of the Rock Hill and Fort Mill schools. I think what makes us work so well together is that we have complementary skills. My background is more in technology and business and consulting, while Amy’s is in retail, education, human resources and sales. As a result, we perform alternate but complementary functions.”
The couple began their journey toward becoming Goddard School franchisees in an interesting way. When first married, the Stricklands moved around the country and the world, living in places such as Atlanta, Singapore, Washington, D.C., and Cleveland. Having three daughters with Amy as a stay-at-home mom, the couple was always finding new pediatricians, orthodontists, and other care providers when they moved…including preschools.
“When we moved to a suburb just outside of Cleveland, I did what I always did and asked around for preschool recommendations,” says Amy. “Where do you hear good things, where do people seem happy? And Goddard Schools kept coming up. So I visited—just as parents visit our schools to see if we are the right fit for their families—and I just fell in love with it.”
Because the couple’s daughter was attending a Goddard School at the time, and because all Goddard Schools require on-site ownership, Amy was able to get to know the owner of her daughter’s school, learning about the challenges and rewards of franchise ownership in the process.
At the same time, Bill was getting tired of getting on an airplane every week for his consulting work, and was receptive to a small business opportunity. Together, the Stricklands found the Goddard School concept so compelling, that they decided to try it themselves as a franchisee.
“Ohio wasn’t home for us,” comments Amy. “The Southeast is more our home; we have family down here. So, we scouted a lot of locations and decided on Fort Mill. We opened our first location in January of 2009, and then expanded to a second location in Rock Hill in January of 2013.”
Bill adds, “One of the reasons we decided on the Charlotte area is because my background is in financial services consulting, so the thinking was that I could keep doing that while she was setting up and running the school. I did continue doing that for a few years, but now with two schools, I’m plenty busy.”
“Charlotte offers so much in the way of infrastructure, and the Fort Mill and Rock Hill areas are growing like weeds,” he continues. “Also, the reputation of the public schools in Fort Mill and Rock Hill is tremendous, and the Carolinas are a very pro-business environment.”
“I would also add that, in the greater Charlotte area, you’re a day trip to the beach or a day trip to the Great Smokey Mountains, you can easily get down to Savannah or Charleston or Atlanta, and the whole region has such a rich history,“ says Amy. “Also, the international airport is perfect for when you want to fly to Europe or the Bahamas. Climate is a big one too…here, you get a little bit of everything.”
“My primary focus is sales and marketing—to keep the schools full, to reach out to the community, and to set the culture for the school,” explains Amy. “I also do classroom observations. I’m heavily involved with recruiting and screening new teacher candidates, and I handle many of your typical HR issues. Bill’s approach is a little bit different.”
“My goal is to get the message out and craft the brand,” contributes Bill, “to keep reinforcing the message of education, to keep setting a higher standard for what we’re all about. I would say each school has a mission, and I’m very proud that ours is all about educational excellence—about preparing each and every child for kindergarten while becoming become independent, enthusiastic learners. In fact, lifelong learners.”
Amy explains, “Goddard’s educational philosophy is brain-based, which is learn through play. The way that I share that with families is, let’s say you’re working on letter formation. You could give a child a pencil and a piece of paper and have him or her practice writing the letter 25 times, which is not very fun.
“A more fun approach would be to take a cookie sheet and pour on a couple tablespoons of kosher salt and then have the child draw the letter in the salt with a finger. The, you shake it up or turn it and have the child repeat the exercise. You’re reinforcing the same skill, but one feels like fun and one feels like work. Play with purpose is one way I like to frame things.”
The word “preschool” means a lot of things to different people as it is often used interchangeably with “child development center” and “daycare.” The Strickland’s approach through their Goddard Schools, however, is different. The Goddard School educates children as young as seven or eight weeks old with the concept that learning begins at birth.
“Our ultimate goal for any of our learners is successful entry into any public or private kindergarten program,” explains Amy. “We use an overall approach in building skill sets, and that includes cognitive, social/emotional, gross motor skills, fine motor skills…those are all puzzle pieces that are necessary for a child to have a successful year in kindergarten.
“So, that doesn’t start at three years old…learning begins at birth. That’s why we write lesson plans in our infant classrooms. We’re trying to set up activities that foster the development of certain skills.”
Higher Standards for Higher Learning
“One of the main things that sets our schools apart,” Amy continues, “is the education level of our teachers. All of our teachers are degreed, something that isn’t common in many childcare centers. Early childhood education is all of the learning, both formal and informal, that takes place before kindergarten.
“Many people, including some universities with education programs, believe that early childhood education begins later in life at 3 years of age. We don’t agree with that, and there’s a lot of science behind the idea of having children engaged from birth. As a result, we also believe that having resources in the classroom—technological and traditional resources in the classroom—is very important.”
“Here, our teachers are working, teaching, educating each child, not just watching them,” adds Bill. “We set out at the beginning to say that we’re not going to be a daycare or a typical childcare center. We’re a preschool, and even at infant level, as Amy said, learning begins at birth.
“Research shows that if you don’t give kids a good start, they tend to fall behind sooner rather than later, and in some cases, they may never catch up. The later you wait, the harder it is for those kids to get back on track, and this can go on to affect their entire lives.”
Although Goddard Systems provides franchisees with a multitude of educational resources, Bill and Amy have found that, because many of their students were coming from homes where learning was already a part of everyday life, they needed to raise the bar. In fact, some of the local schools are taking note as graduates of Goddard Schools often crave even more education and are surpassing their peers upon entering the public school system.
“One of our philosophies is to adhere to continuous improvement. We set the bar in one place, surpass it, and then move it again,” explains Bill. “We also revamped our educational processes to embrace 21st century skills, an initiative that looks to go beyond just reading, writing and arithmetic to additionally teach critical thinking skills, creativity, communication and collaboration.
“An organization that supports 21st Century Learning (Washington, D.C.-based P21.org) visited our schools in 2012 and recognized our schools as being Exemplar in 21st Century Skills learning, one of 20 in the United States.”
Bill continues, “Today, businesses are saying to the educational community, ‘We need people who can think, not just memorize.’ When you look at it, all the information you need is available at your fingertips on the Internet these days. But, now that you have information, can you solve problems with it?
“We’ve changed how we teach, and then we started taking it up another notch and rolled out a S.T.E.M. program that focuses on science, technology, engineering and math. We have kids building robots, kids as young as three doing computer programming.”
Additionally, the Strickland’s Goddard Schools use iPads, interactive whiteboards, and other technology in the classroom in order to prepare students for the digital landscape that is unfolding before them.
“This is where Bill and I bump heads a little bit,” laughs Amy, “because I’m more old-school. I certainly recognize the value of technology, but as we often say, ‘Parents are teachers too.’ We encourage our parents to unplug from the technology for a while.
“While you’re walking the dog with your child, encourage them to find a license plate from another state or one with a certain letter or number. Identify living and non-living things. Challenge your child to find things that come in pairs in the bedroom when tucking him or her in at night. So, yes, technology is important, but so is person-to-person interaction.”
Bills adds with a smile, “And that’s one of the strengths that Amy and I have—we push each other and challenge each other, but that’s how innovation and achievement come about. Study the problem and negotiate. And that is one of the many reasons we’re successful.
“Our mission is educational excellence, and through our two Goddard Schools, we’re proud to combine our skills to complete the mission.”
Air travel is a necessity for most businesses, but if you ask any business traveler what he or she thinks about air travel you are likely to hear a litany of complaints about high costs, lengthy trips, time away from the office, stress, and concern about safety protocols.
Ryan Stone and Eric Legvold are making it more convenient and faster for business people to travel and offering an alternative that will allow them to work while they travel. Their businesses, Jetpool and SmartSky, work to relieve the stress of commercial business travel while providing a speedy, reliable and capable telecommunications connection.
The two business partners go back a long way. Growing up in Florida, they lived across the street from each other and attended middle school together. Fast forward a number of years when the two friends relocated to Charlotte around the same time, and reconnected.
Legvold, a pilot, was flying planes for a charter company. Stone, a Naval Academy graduate and submarine officer, was working as an engineer for Duke Energy. Stone was also pursuing an MBA and was looking at new business opportunities. The two started talking about using their different areas of expertise to start a business, and the genesis of Jetpool was underway in 2004.
Legvold had started flying at the age of 18. He learned corporate aviation during his eight years working as a corporate and charter pilot. He has more than 19 years of professional aviation and industry experience.
Stone’s contribution was his business acumen and his access to business coaches and professional reviews of business plans through the MBA program at UNC’s Kenan-Flagler Business School.
“There is a lot of room for companies like ours that focus solely on aviation,” explains Legvold, Jetpool’s cofounder and CEO. “We provide charter services to clients in planes that we acquire or lease. We also maintain the aircraft and provide all the regulatory compliance.”
Even in the early days of Jetpool, the partners couldn’t help but notice another big issue in business air travel—how to increase productivity on electronic devices by surmounting telecommunications constraints.
“Making a mobile phone call, let alone conducting business via telecommunications connections via video or audio during a flight, has always been fairly impractical, to say the least,” says Stone. “As a consequence, businesspeople are forced to figure out what they need to download before they travel.”
Enter SmartSky, the partners’ new launch, to provide interconnectivity with air-to-ground transmitters, allowing business travelers to work during air travel on anything that requires connectivity—making phone calls, downloading documents, or conducting video conferences.
Both businesses are located near the Charlotte Douglas International Airport, where it is easy to meet with customers.
Getting Off the Ground
Both Stone and Legvold are quick to credit the Charlotte business community as essential to the establishment of their companies.
“We’ve found some nice partnerships,” comments Stone. “Charlotte is the kind of community where people work together to help each other with business needs.” Both praise Packard Place, a hub for business start-ups, as extremely helpful. They also laud the Business, Innovation and Growth Council (BIG), which the two joined when starting Jetpool, and a place they returned to later.
“When we were ready to open SmartSky, we went back to BIG and got feedback and pushback that was helpful in starting the second company and separating the two,” adds Stone.
Stone’s MBA coaches and classes offered assistance. The Jetpool founders presented a business problem to a class asking for assistance with cloud-based computing. The students returned good business advice, even recommending three vendors to consider, from which Jetpool selected one to develop its IT system.
Stone and Legvold also consulted with the Golden Leaf Foundation-backed Wireless Research Center of North Carolina on patent work and wireless analysis.
Jetpool was incorporated in 2006 with three partners; Paul Sameit, another pilot, joined Legvold and Stone as CFO. Opening during the recession was difficult, but soon after its start, Jetpool was asked to bid on and won a contract for aviation from a local Fortune 500 company. Day-to-day operation benefitted from Stone’s systems engineering and Sameit’s business background, while Legvold provided the aviation and aircraft system experience.
“We provide aircraft management and charter services; we are a turnkey operation,” says Legvold.
“We offer our clients safe travel on their time, and have the ability to schedule and maintain airplanes to the level required by a Fortune 500 company,” assures Legvold. “Business executives and corporations have come to view business travel as a necessity, with the goal being to use it as a tool and a time machine.”
Private jets allow key executives to pack more into their day. Private jets typically land five to 10 miles from the traveler’s ultimate destination, allowing executives to avoid long waits for commercial flights, overnight stays and long rental-car rides. In addition, there are no security checkpoints to endure, saving even more time.
“Over the long term, the effects of wasted time and added stress can even affect career choices or early retirement options,” Stone points out. “We are able to offer a time-effective, cost-effective, productivity-effective alternative at Jetpool.”
Jetpool clients are a mix of large companies and smaller clients. For companies that require extensive executive travel, Jetpool offers charter management. Companies that don’t require as much time in the air can access private aviation through hourly chartered flights or by participating in Jetpool Shares, which combine the access of jet ownership with the financial accessibility of a lease.
Essentially, Jetpool acts as an outsourced aviation department, maintaining aircraft, providing pilots and scheduling fights. At present, the company has 30 employees; 15 full-time and three part-time pilots with seven airplanes, up from four in 2013.
“Jetpool has grown every year, and been profitable since it began,” boasts Legvold. “Year-over-year we’ve seen a 35 percent growth in revenue. In the future, I see us holding to a minimum 20 percent growth rate.”
Legvold points out that safety is a core value of Jetpool, learning and adopting a mindset from its Fortune 500 clients on how to build a “culture of safety.” The company has earned an IS-BAO, an international certification for business aircraft operators similar to ISO 9000, becoming one of the first adopters of this certification.
Trust is another core tenet and a companion to safety for Jetpool clients.
“It’s different from commercial airlines where you don’t know who’s flying the plane and you’re not sure how well the plane was maintained or why there might be a maintenance issue delaying your flight,” says Legvold.
Legvold says the company gets to know its passengers over a period of years: “We know their habits and what they like so we can be better prepared and always ready to serve them. One client’s ‘few minutes’ might be an hour or so, while another client’s ‘few minutes’ might be 15 minutes. We’re always ready and operating on their time.”
He thinks that the company has the “right mix” of people working in maintenance, operations and scheduling to continue its expansion, perhaps into the Washington, D.C., market.
SmartSky Set to Launch
Stone and Legvold’s newest brainchild, SmartSky, will offer airborne connectivity with the same kind of service available in an office or home by connecting aircraft to ground antennas, rather than satellites in orbit, to allow for real-time sharing of data. SmartSky is scheduled for a beta-customer launch in late 2015, followed by a national commercial launch in 2016.
Stone says the impetus for the new venture originated from a Jetpool client: “We had a specific request for telecommunications connectivity, and when we looked at the options available, we found limited services available. So we set out on a quest, and SmartSky was born.”
SmartSky was incorporated in 2011. Stone takes primary responsibility as the new company’s president and director. The leadership team of Stone and his Jetpool founding partners Legvold and Sameit are rounded out by a fourth partner, Stan Eskridge, who served as Stone’s MBA business school coach, and is the company’s COO and a director.
“Particularly on a plane, everyone wants the same standard of connectivity they have everywhere else,” comments Stone. “The airlines have spent a lot of money to get to 3G, which is state-of-the-art for commercial planes. Unfortunately, that is like accepting a 3G level of performance on your cell phone while the rest of the world is becoming a 4G system.”
The 3G air connectivity standard for most commercial airlines leads to problems with speed and bandwidth, a function of the system which uses older technology or satellites in space.
“This is not an easy market to enter; there is so much noise in the market,” Stone points out. “We were able to acquire some patents and work on a ‘secret sauce’ that will allow us to offer a viable solution.”
The company’s initial plan was to offer 4G connectivity first to business aviation and later to commercial airlines, but, Stone says, “The airlines came to us and asked us to get to them sooner. We’re now involved in discussions with leading commercial airlines.
“The reason for the intense interest is clear—with the 4G connectivity experience, SmartSky will offer 10 times better than what you would get today,” continues Stone. “It’s the same as you would get in your home or office. You’ll be able to make video conference calls, download documents and watch movies.”
With its launch, SmartSky will be the first company in the U.S. that will have this combination of high bandwidth and low latency—or delay—for connectivity in the sky, says Stone.
Untangling the Regulation
“Nothing in aviation is simple,” Stone comments. “And starting SmartSky was a complicated business with the bureaucracy of the telecommunications industry and compliance requirements
“We realized very quickly that we needed telecommunications expertise,” says Stone. “We needed someone with an intimate knowledge of the marketplace. Haynes Griffin, our chairman and CEO, was the CEO of Vanguard Cellular (one of the co-owners of Cellular One), and the first chairman of the cellular industry association, and a mentor. We feel fortunate that he was interested in getting involved in our new venture.
“Haynes brought in other world-class experts, including former FCC Chairman Reed Hundt, to help us with regulatory strategy. We needed a view of where the world is headed and so we added two Intel Corp. board members.”
SmartSky also needed to line up partners. It worked with Textron Aviation (owner of iconic brands Cessna and Hawker Beechcraft), Duncan Aviation, and DAC International as partners to help with the certification and installation of hardware, Satcom Direct as a subscription and customer support partner, and Harris Corporation as a radio development partner.
“We decided to keep our launch of the business under wraps until we could check the boxes on all the major risk items,” says Stone. “We made our first public announcement at beginning of October after working with our partners for more than a year, and working on the business for more than three years.”
Cost for SmartSky’s new service will be comparable to its main competitor’s cost, Stone says, and likely to be embraced by potential customers, hungry for some new options in air travel telecommunications. Potential competitor AT&T backed out of entering the air-to-ground telecommunications field in April, based on its decision to focus on other core parts of its business.
“We have this unique vantage point. The vision of the company is to transform aviation through disruptive communication,” says Stone. “We can give customers something they desperately need and keep innovating so we won’t be disrupted ourselves.”
SmartSky’s closest competitor Gogo has 2,500 subscribers, using just 4 MHz of bandwidth. In contrast, SmartSky will access 60 MHz of spectrum and a huge, patented 4G pipeline, boasts Stone.
“The potential market is huge—there are about 12,000 business jets in commercial aviation so there is plenty of untapped market,” says Stone.
Business growth is good at Jetpool and expected to be in demand at SmartSky. Legvold attributes their business success to “finding the right people to grow the company.”
“As an entrepreneur, it never seems as fast as you want it to go, but what we’ve accomplished over the past few years is extraordinary,” reflects Legvold.
“Our growth is also a story of embracing local entrepreneurial ventures,” adds Stone. “If you start one business, you are more likely to start another.
“And, if our business plan goes well, we may be the next Fortune 500 company.”
From robotic arms on automotive assembly lines to energy regulators for utility companies, automation is everywhere. For Eclipse Automation Southeast, located in the Whitehall Technology Park, this means big business.
Eclipse Automation Southeast (SE), along with Eclipse Automation Southwest located in Fremont, Calif., are the newest appendages of Eclipse Automation, Inc., headquartered in Cambridge, Ontario, Canada.
Eclipse Automation SE President Eric Nitsche explains, “Eclipse Automation was started by four individuals who had been in the automation industry for some time. They all left the company they worked for and started Eclipse in a 3,200-square-foot space and the company has grown steadily over the last 13 years. Even through the financial collapse, Eclipse managed to grow and was able to acquire a number of struggling companies along the way.
“In the latter part of 2012, customers forced expansion,” continues Nitsche, “and the question became whether to continue to expand operations in Canada or to make the leap into the U.S. That was a straightforward choice because 80 percent of the company’s customer base is in the U.S. That’s when they contacted me and asked me to head up their U.S. expansion.”
The Custom Automation Operation
Nitsche was not altogether unfamiliar with Charlotte. “I had worked for another automation company for many years,” he says, “and that company had sent me to Charlotte in 1998. When Eclipse approached me to take over their U.S. expansion effort, I immediately recommended Charlotte as the first location.
“The Southeast is extremely vibrant and Charlotte is situated with the I-77 and I-85 sector right here, providing easy access to virtually anywhere in the Southeast. If you have to go further, there are few better airports than Charlotte-Douglas. Also, being a Charlotte resident, I knew the market, and I knew we had access to an abundance of skilled trades and engineers.”
One of the keys to Eclipse Automation’s success, both in the U.S. and in Canada, is the fact that all of the owners are involved in day-to-day operations. As Nitsche explains, this is incredibly important as the process of turning a concept into a finished piece of custom automation can be quite involved.
“The conceptualization process is important because what we deliver doesn’t yet exist,” Nitsche explains. “You can’t open a catalog and point to something and say ‘You need this.’ So, to start, we go out there and find a need. From there we develop high level concepts and build our proposals.
“If we’re fortunate enough to win the work, we generally start with a detailed mechanical engineering process. This takes the concepts and starts adding details to them from a mechanical perspective. We then layer over the controls phase, which is simply put, the electrical side of solution. I often like to analogize the mechanical side to the brawn and the controls side to the brain.
“Once the design is evolved, we move it out to the floor where we manufacture all of the bits and pieces that we’ve custom-engineered and procure the engineered-to-order content or off-the-shelf commodity parts. Once that’s complete, the assembly phase begins. Everything starts with a concept, moves through mechanical and controls engineering, and then we complete a mechanical and electrical build. Once the assembly phase is complete, we program things on the software side—the brains of the machine.”
He adds, “Then we debug and integrate, so all of the guys are out there on the floor making sure everything is working accordingly. Once we’re sure the machine is ready, the customer comes and validates, we deconstruct, move it to the customer’s site, rebuild, and revalidate.”
Nitsche smiles, “After all of that, everybody comes home and we start the next project. With a team of our size, we have roughly 12 projects going at any one time in different stages of completion.”
A Customer-centric Approach
Eclipse Automation serves a number of tech industries. The Charlotte facility focuses primarily on automotive at present. Currently, the Southeastern region is experiencing high growth in the automotive sector as many manufacturers abandon the Midwest.
However, Nitsche expects the North Carolina facility to begin taking on more work in other industries going forward. With North Carolina being home to a number of universities, health care providers, and energy companies, Eclipse Automation SE is poised to take on those industries as well, something the Canadian headquarters already does a lot of.
In addition to providing custom automation services, Eclipse Automation also offers engineering services.
“Sometimes, customers need help trying to plan and execute strategies to go to market,” explains Nitsche. “Whether it’s design for manufacturing, a plant layout, proof of principles, engineering services, or design of experiments, we can make it happen.”
He adds, “Because many companies are finding themselves strapped for resources, they often look outward for engineering services to help them decide how to approach things.
“No matter the job, our purpose is to become an extension to our customers’ engineering teams. We practice customer-centricity, trying to understand and continually learn what challenges the customer is experiencing and what solutions they need in order to be effective in their missions.”
Eclipse Automation has been equally purposeful in its mission develop their own enterprise database system to provide total customer service. Unable to find software to meet its needs, the company decided to create its own SQL database application, and today, this database ties together everything the company does to meet customer expectations.
“Other companies try to mesh together different software platforms,” explains Nitsche, “but it just doesn’t flow as seamlessly as needed. Here, everything is automated, right down to employee login. From there, virtually any aspect of the business, depending on the employee’s level of clearance, can be accessed within about five clicks of a mouse.
“Our customer relationship management, our engineering databases, our training modules, our scheduling, our project management, everything resides here. This allows us to be effective for our customers and it encourages everybody in the company to communicate.”
The Evolution of Automation
As Eclipse Automation has grown, the scope of the company’s projects has evolved. Starting out, only a handful of employees were available to work on projects, limiting the clients Eclipse Automation could bring in. Today, however, Eclipse Automation works with some of the biggest names in manufacturing.
According to Nitsche, “If you name the top 10 manufacturers in the world right now, we probably work with eight of them. Part of how we’ve remained competitive is to have a fairly flat hierarchy. We just get it done.
“Our team consists of myself, department heads in the manufacturing area, the mechanical and control teams, someone who takes care of the supply chain side, a controller on the finance side, and a project management team. This allows Eclipse Automation to remain nimble while still being able to take on large projects from top manufacturers.”
Another key to the company’s success is word-of-mouth advertising. While Eclipse Automation does attend trade shows and use traditional advertising on occasion, Nitsche says that doing a job well is the best way to market. In addition, digital tools such as social media are being implemented in order to get the Eclipse Automation name out.
At the heart of it all, however, is the employee selection process. Eclipse Automation recruits skilled tradespeople and engineers based upon experience, aptitude and education. Additionally, all employees are supervised by veterans, and teamwork is a must.
Nitsche explains, “All that we do is team-based. Collaboration is crucial in our business, and having brought in a lot of people from different backgrounds has been challenging, but it’s worked out great because so many people have different experiences and skill sets. While we’re working with the tools that our headquarters has provided, we’re doing so with a whole new cast of characters.
“As far as measuring success, ultimately, it comes down to three things: Can we be proud of the end product? Is our customer satisfied? And did we profit at the end of the day?
“Because we’re a team, there’s not necessarily a key performance indicator. Unlike surpassing the last month’s sales expectations, performance is evaluated different in our industry. As a company, we certainly have goals, objectives, and measurable, but it takes a team to get things done.”
Manufacturing Making a Comeback
In an interesting turn of events, manufacturing as a whole is making a comeback in North America. Although many companies have gone offshore in recent years, they have been met with unforeseen challenges. Quality control issues have been a thorn in the side of many in the offshore manufacturing sector, and natural disasters, such as the tsunami that struck Japan’s Fukushima nuclear reactor, have crippled many in the industry.
“Manufacturers are starting to realize that, with all of these issues, they are losing control of what they can and can’t do, so a lot of companies are rethinking things and bringing their businesses back to North America; yet they’re still pressured to be competitive, and automation is a key component in that,” says Nitsche.
“The world we live in today changes and turns over so quickly. If you do today what you did last month, you’re already behind. But it’s a fine line. You have to leverage engineering where it makes sense. You don’t want to keep reinventing wheels, but you don’t want to ignore new technology. There’s always better ways to do things.
“For example, we have already started to utilize 3D printing in some ways. It’s a complimentary technology that I’m sure we’ll find more and more ways to utilize.
“In order to get things right, now and going forward, we have to plan, plan, plan,” Nitsche maintains. “When a project comes along, the tendency is to jump right in, but what we have to do is slow down for a minute and gather everyone and plan. Everybody needs to be on the same page.
“That could take two hours, it could take two days, it could take two weeks, but it’s a make-or-break point. Everyone needs to understand the requirements and budgets and effort required, and then plan the project accordingly, and then monitor progress in real-time and follow the plan through.”
One challenge that Nitsche mentions is finding qualified people in a competitive market. He says, in fact, that sometimes Eclipse Automation SE has had to look outside of the region for skilled employees, but fortunately Charlotte isn’t a hard sell.
“Because Charlotte offers so many amenities…good school systems, professional sports, entertainment, museums, the weather…it’s easier to attract employees to Charlotte versus many other areas of the country. Charlotte has a lot going for it, and when we have to go outside of the region to recruit, we’ve got a good story to tell,” Nitsche comments.
As for the future of Eclipse Automation and the automation industry as a whole, Nitsche is enthusiastic and excited.
“Looking forward, first off, Eclipse Automation has always been extremely successful, and now that we’re here in the Charlotte area, I think it’s going to open doors that were never open before.
“We have a tremendous legacy and tools and processes that we’ll be able to offer to a far bigger audience. When people start to see what we have to bring to the table, it’s going to explode.”
He laughs, “In fact, it wouldn’t surprise me if our American operations ‘eclipse’ our Canadian operations somewhere in the next decade. The opportunity and audience are just that much bigger.
Will we have more locations in the U.S. going forward? That’s certainly possible, although not on the drawing board just yet. But, even just here in the Charlotte area, the opportunities are immense, the industry is ripe, and to me, the sky is the limit.”
Kenneth and Sam Ayers knew a lot about buildings long before they got into the cleaning and maintenance business. Both trained engineers, the father and son duo began working together in 1999 when Kenneth joined his father in his custom home building business in
In 2006, they decided to diversify into building maintenance, buying a franchise of Kansas City-based City Wide Maintenance. By 2008, they had City Wide Maintenance of Charlotte up and running, covering the
Timing could not have been more fortuitous. “God was looking out for us,” says Sam. The construction industry, among the hardest hit by the 2008-2009 economic recession, was just beginning to reel from the loss of business that would continue to decline over the next few years.
“We had been thinking about integrating vertically, opening a cabinet ship,” contributes Kenneth, “but were lucky to get out of the building industry when we did and into a recession-resistant business.
The Cleaning Solution
City Wide Maintenance of Charlotte is a building maintenance management company that specializes in janitorial and maintenance services primarily for commercial buildings.
“Working through our network of service partners, we help folks that outsource their cleaning and maintenance needs,” explains Kenneth. “Anything that makes a building and property look better, we can do.”
Each City Wide customer utilizes janitorial services and can access as many as 20 other services as needed, including painting and dry wall repair, parking lot services such as asphalt sealing and striping, lawn care, window washing, carpet cleaning, lighting services, floor refinishing, concrete coating, pest control, pressure washing, carpet and tile installation, restroom remodeling, handyman services, picture hanging, and more.
City Wide maintains numerous types of facilities from single and multi-tenant commercial businesses to medical offices, schools and faith-based organizations. “Our target building is a 25,000-square-feet, single tenant owner-occupied building,” says Kenneth.
Area customers include Britax, with its 500,000 square feet of building space, Tindol Ford, several Charlotte Eye, Ear, Nose and Throat Associates (CEENTA) locations, Precision Steel Warehouse, Piedmont Plastics, US Leisure, The Goddard School, and Dilworth Child Development Center, to name a few.
“By partnering (sub-contracting) with small to mid-sized companies that do not have their own sales and management teams in place, we are able to provide services to customers and deliver professional management of each vendor,” says Kenneth. “It’s a win-win-win for us, for the contractors who need help in developing business, and for the customers who no longer need to manage building maintenance. It’s also a huge benefit in terms of convenience, efficiency, and financial commitment.”
“We got interested in this business because our background was in construction and the business model of City Wide was similar to what we were used to in the building business,” shares Sam. “Plus, one of the appeals of this was that it is, if not recession-proof, recession-resistant.”
City Wide Maintenance, the parent company, offers franchises in the 76 largest markets in the
Indeed, City Wide Maintenance of Charlotte has averaged annual growth of over 52 percent each year since 2009, so much so that Kenneth and Sam are willing to entertain the possibility of acquiring another market, although they insist that the
“Our 10-year goal is to continue to experience the growth we’ve achieved during the past several years,” says Kenneth.
The Father-and-Son Connection
City Wide Maintenance was started in 1961 by Frank Oddo in
Then City Wide provides leadership, mentoring and business development to ensure that its contractors provide seamless service to clients. In 2001, the company began franchising its concept and today there are 40 City Wide franchises around the country.
Kenneth and Sam both say that the fact that City Wide itself is a father-and-son venture helped to bring them into the franchise fold.
Kenneth says City Wide Maintenance of Charlotte mutually benefits from relationships with other City Wide franchises, particularly along the I-85 corridor, such as those in the Research Triangle, Greenville/Spartanburg and
“We work closely with them, sometimes talking weekly about challenges and opportunities. We also partner with them to share customers who have buildings in different markets,” says Kenneth. “We’re prospecting one right now from a
In some ways, the company operates more as a family business than a typical franchise.
“Above and beyond the janitorial services, we have autonomy to decide what we do,” says Kenneth. “In our business model, the core of the business is the janitorial and represents 75 to 80 percent of our revenue. That leaves room for us to decide what additional services to provide and how to distinguish ourselves.
“Some of that is dictated by geography. For instance, we don’t do a lot of snow removal.”
Work with the customer begins with a detailed needs analysis, describes Kenneth. That is followed by identifying the most appropriate service partners for the work involved, determined by expertise and geographic location.
“Most importantly,” says Kenneth, “each customer is provided with support from a designated facilities service manager with whom they can communicate and who will be watchful of current and upcoming needs. The facilities service managers catch things before they become big problems—for instance, frayed or damaged carpet.”
“Customers like to have someone they trust—someone that already knows the building—to call upon,” adds Sam. “This is a huge service to companies that, in many cases, have office managers trying to keep track of the needs of a huge building. Our strengths are the time savings we offer through managing services and the ability to put the right people on the job.”
City Wide boasts a retention rate of over 90 percent according to Kenneth.
“We mostly work with service companies that don’t have the staff, time or expertise to go out and market their services and negotiate contracts,” explains Kenneth. “We become their sales team and are a catalyst for their growth. A lot of these companies may not exist or be at the size they are without us.
“We feel responsible, in part, for the 125 employees that are associated with our service contractors who specialize in all the areas we might be called into.”
Since contractors are always looking for business and City Wide is always looking for contractors, the company holds an open meeting for potential contractors every four weeks or so. “We also run ads on Craigslist and get recommendations from existing contractors,” says Sam.
City Wide requires that the contractors conduct full background checks on their employees and provide that information to City Wide management. “So many people reach out to us,” says Kenneth. “We have to be very aware of their capabilities. We can’t just put anyone in one of our buildings.”
“We’re pretty proud of our Performance Plus Program,” admits Kenneth. The proprietary program outlines six steps and strategies to optimize cleaning time and focuses on preemptively attacking dirt before it comes into the building. With a commitment towards indoor air quality, the company uses high efficiency chemicals and equipment to ensure a deep clean.
City Wide considers itself to be environmentally friendly. “We don’t use toxic chemicals,” states Sam. “Everything we do is green where applicable,” says Kenneth. “All of our cleaners are green-sealed certified.” Kenneth says that they are also careful to train all workers in the proper use of chemicals and how and where to dispose of chemicals and dirty water.
The company is also guided by state regulations and OSHA requirements, particularly in settings such as schools, food distribution areas, day care centers, and ambulatory surgery centers. For instance, in day care centers, there are requirements regarding carpet cleaning, air returns and vents, and how toys are cleaned. With food distribution, there are requirements around the use of safe disinfectant cleaners. Regulations also are applied for personal protection equipment, such as steel toed shoes and safety glasses, in certain environments.
All in the Family
City Wide Maintenance of Charlotte has six management employees divided between sales associates, facility service managers (FSMs), and operations support staff. Each FSM is responsible for a number of buildings and manages a rotating schedule for visits to the property. Sam also serves as an FSM. Kenneth’s wife Catherine serves as the company’s part-time financial coordinator.
“Our office doesn’t get a lot of telephone calls; not a lot of people knocking on the door,” says Sam. Existing customers will call Kenneth, me, or their FSM directly. For prospective customers, we do the calling and door-knocking.”
“A lot of our efforts are simply out on foot canvassing buildings, stopping by or making calls and sending emails to building owners or tenants,” remarks Kenneth. “Often information regarding ownership or property management will be posted on the door.”
City Wide staff is constantly reviewing Google maps and drilling down into
City Wide has established specific metrics for their outreach, aiming at 2,000 contacts or “touches” each month. Typically, that number of contacts will generate three to five new customers. New buildings are steadily coming onto the
A native of
Over time, he grew tired of working with large companies and went full-time into the home construction industry in 1991 where he remained until the City Wide opportunity presented itself. Commuting from
Sam’s eventual retirement will be a real issue for Kenneth and the business, and the pair are beginning to work on a succession plan. “Every business partner has to plan on how to replace himself,” remarks Sam.
“Being involved in a 24/7 business means occasionally getting calls during the night. Fortunately, we have people out at night who can handle most issues,” says Kenneth. “Sometimes Sam and I get calls, but unless there is a true complaint or problem, we’re not as involved at night.”
Asked if they have any horror stories, Sam recalls, “The worst thing that has happened was one of our contractors was on his way to clean a building in
“We’ve been very fortunate,” Kenneth says nodding. “The only times cleaning could not be done on schedule was due to inclement weather.”
Overall, Kenneth and Sam say they have enjoyed working together and have managed the inherent kinks of working alongside family members.
“The great thing about it is that I know I can trust him at all times; I don’t have to worry about it,” says Kenneth.
“We’ve been working together now for 15 years and we haven’t choked or kicked one another,” laughs Sam. “It wouldn’t work with every father and son but we’ve managed to get along so far and it’s working out well.”