Keeping up in the fast lane - includes article on James Callano

Nation's Business, July, 1987 by Nancy L. Croft

Keeping Up In The Fast Lane

Margie Tingley knows the importance of good morale to keeping her employees' creative juices flowing. She has designed a training room where a realistic sky painting on a dome ceiling gives the illusion of sunny spaciousness. She also has painted a tropical rain forest on the walls of one of her company's cinderblock stairwells. She even has gone so far as to dye her hair red and green for the Christmas season.

"It all comes down to bringing a lot of excitement to your work,' says the president of software design firm Tingley Systems, Inc. "I've tried to create a pleasant environment for my employees, and I give them a lot of freedom. Creative people need a feeling of spaciousness.'

Tingley's San Antonio, Fla.-based company, which develops comprehensive management software for health maintenance organizations, has doubled revenues annually since its founding eight years ago. Last year it grossed $20 million. Tailoring software to a burgeoning industry put Tingley, 49, in the fast lane, but she says it is her special attention to boosting employee morale and creativity that keeps her there.

Each year hundreds of entrepreneurs join the ranks of fast-growth companies, yet few can maintain control of a company that doubles in size year after year. What is the secret to handling such exponential expansion? Nation's Business asked this question of seven fast-lane entrepreneurs, and their answers were surprisingly simple.

"Complete employee accountability' is what James Callano says has helped him maintain the fast-growth momentum of his business seminar firm, CareerTrack: "On Friday afternoon, every person in the company is sitting at his or her desk, writing out exactly what they've done in the last five days.'

From the mailroom up, employees update their supervisors on their special achievements and any problems they need help with. "It all flows up to me, and I read 20 different reports every week so I'll know what's going on,' says Callano, 29.

Boulder, Colo.-based CareerTrack has doubled revenues annually throughout its five-year life, and last year it grossed $26 million. Chivas Regal recently recognized Callano's savvy with one of its first annual Young Entrepreneur Awards.

Keeping management and business plans finely tuned is also key to Callano's success. "We're getting really big right now,' he says, "but my partner [Jeff Salzman] and I have been able to keep the organization lean with only five layers of management. We've tried to avoid having 17 layers of management and bureaucracy.'

Like Callano, Henry Haimsohn, founder of PACE Membership Warehouse, Inc., also believes in the power of communication. "In a high-growth environment, particularly when you start at base zero as we did three years ago, there is a tremendous amount of difficulty in managing to keep everybody and every task pointed along parallel paths,' he says.

After its first twoyears of operation, PACE, a cash-and-carry chain of 25 warehouses that sell wholesale brandname products from office supplies to groceries, reported net revenues of $275 million, a 261.5 percent increase from its start-up year. In the first three quarters of 1986, PACE grossed more than $360 million.

"Communication is among the most critical [considerations] in that kind of an environment,' stresses Haimsohn, 40, also a Chivas Regal Young Entrepreneur Award winner. He gathers his top managers at headquarters once a week for staff meetings where they plan the next week's course of action.

Most new business people, however, are not prepared for success, say fast-lane entrepreneurs. One mistake that causes hot start-up businesses to lose their sizzle quickly is simply failing to make sure supply can meet demand.

Samuel Hinote was so sure his product would be in great demand, he devised a way never to be caught with empty shelves--or ponds, in his case. Hinote founded Delta Catfish Processors, Inc., in 1981, when health and fitness concerns were pushing consumers toward eating more fish.

Anticipating booming sales, Hinote implemented a system that would guarantee a constant, large supply of product year round. He issued a 100 percent private stock offering--open exclusively to catfish farmers with ponds near his Indianola, Miss., processing plant.

"It was important to have a guaranteed supply for the market to attract big customers,' says Hinote, 44. "Having stockholders committed to supplying the company gave us an advantage over our competitors who had to purchase on the open market.'

For every acre of pond that farmers pledge to harvest for Delta Catfish Processors, they may buy one share of stock. Hinote says the company always has a waiting list of farmers wanting to buy stock. This edge, says Hinote, is what has fueled the company's rapid growth. The 1,200-employee company's 1986 sales--$100 million--were double those of the previous year. And in less than six years, Delta Catfish Processors has become the largest corporation in the farm-raised catfish industry.