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

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

"I got my managers together and said, "In 1986 we're going to regain control of this company, and we're going on with research and development of new products,'' which had come to a halt during the stock offering.

U.S. Intec ultimately generated $40 million in the first nine months of 1986, but, Adair says, "we're not as flamboyant as we used to be. Once, someone would walk into the office with an idea, and we might act on it that moment. Now every decision first has to go to the board, we have to present it well, and we have to get approval on it.'

Being public, he says, "is like juggling three balls--shareholders, employees and customers. Your responsibility to all three increases a hundredfold.'

PACE'S Haimsohn also compares managing his public company to a balancing act. "There is the need to spend more time dealing with analysts and shareholders--additional responsibilities,' he says. You have to satisfy the market's short-term demands by showing quarterly profits. "That is somewhat in conflict with long-term strategic planning. . . . But in many ways, being successful in the short term can ensure long-term success. It's important to bring them together so that short-term planning and long-term prospects are consistent, and that's a continuous balancing act.'

James Callano, on the other hand, found that slowing down his company's rapid growth would be the surest way to secure future expansion. "If you try to grow at rates of 100 percent a year, you could end up crashing and burning,' he says. "This past year we grew 75 percent. But we're tweaking our systems, planning further in advance--nine months instead of three.' Callano says he expects CareerTrack to grow only 30 to 40 percent this year.

Entrepreneurs who don't have the foresight to "tweak' their fast-growing companies may find they lose sight of their original purposes. Fast-lane companies, says Larry Hohol, president of privately held Penox Technologies, are constantly bombarded with temptations to diversify in many directions during start-up years. "Once you taste a little bit of success, you have a tendency to want to branch out into new ideas and marketplaces.'

Hohol's Pittston, Pa., company manufactures and distributes home health-care products, such as liquid oxygen. Last year it grossed $20 million (10 times his first year's revenues). He says he is tempted every day by myriad opportunities to expand.

Although Hohol has had no formal business training, the former police officer's common sense warns him of the dangers of straying from his company's main purpose. "It's extremely important in your start-up phase to put blinders on. Don't let opportunities distract you. Don't deviate from your course. Accomplish your mission, and after you've accomplished it, then you can start looking at . . . diversification.'

Passing up opportunities is not that difficult, says Hohol, 30. "There are innumerable opportunities out there. They may take a different shape or form a year from now, but they will still be available.'