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Growth Strategies

Profile of Inc. 500 companies that are redefining their industries.

Visit the Inc. 500 site, which includes a fully searchable database of winners from 1983 to the present

The fastest-growing companies don't just exploit theirniches -- they redefine their industries. Here's how

Finding the High-Stakes Customer

Allsup * Belleville, Ill.

#333

After quitting his job with the social Security Administration, in 1982, Jim Allsup spent more than a year studying how disability claims were mishandled. Then he started a business that helps insurers and employers -- institutions with gigantic stakes in the outcome -- obtain proper benefits for employees. With the company's guidance, clients get to reduce their private insurance premiums or self-insured payments significantly.

One thing that's enabled the company to grow to $3.7 million in eight years is its compensation strategy. Rather than receiving straight salaries, claims people get incentives based on the number of cases they're able to resolve and the size of the settlements. A typical case might save a company $100,000 in benefits over 13 years. Allsup is preparing to introduce some new products, such as health-and retirement-benefits administration programs. Instead of selling to consumers, it will target institutions like banks, enabling them to form stronger ties with their customers.

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Vertically Integrating Service

Bendco/Bending and Coiling * Pasadena, Tex.

#418

To say that Bendco is in the metal-bending business is to offer only the faintest outline of what it does. This seven-year-old company functions more like a design consultant to customers in the chemical, refining, and construction fields. Staffed by highly skilled metalworkers, many of whom worked for a now-defunct division of Armco Steel, Bendco helps customers map out the best configuration of pipes and beams to meet their requirements in safety, cost, or design.

Bendco's early focus was on Houston-area petrochemical and oil refiners, to whom founder Jim Friery pitched the safety and cost benefits of bending versus welding. Even when purchase orders seemed unlikely, Friery notes, "we'd visit their plants and offer design suggestions at no charge." Prospective customers have always been encouraged to visit the company's facility to discuss future projects.

"We love to show off," Friery concedes. Each of Bendco's 10 machine operators, for example, is certified to work in several different kinds of metals. Most have certification as independent inspectors as well. Too much training? Not as far as Friery is concerned. "We think it helps people do a better-quality job, and it gives our customers a feeling of confidence." As Bendco attempts to do more business internationally, Friery thinks the investment will pay off.

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Tightly Controlling Quality and Image

Pleasant Co. * Middleton, Wis.

#69

At a time when lots of companies are out there slashing overhead and farming out everything they can, Pleasant Rowland has attempted to keep as much of the work as possible in-house. Pleasant Co. produces and sells a line of high-end books, dolls, toys, and clothing aimed at girls between 7 and 11. The lengths it goes to maintain the integrity of its products and service are extraordinary. Rowland launched her company five years ago less as a profit-driven enterprise than as a vehicle for teaching girls about U.S. history. She began with three fictional characters from different historical periods and has recently added a fourth. Each is brought to life by a doll, priced at around $80; period artifacts, which run as high as $175; and six books about the heroine's adventures.

A former elementary-school teacher, Rowland oversees product development, working closely with company-employed historians and advisers. The dolls and accessories are manufactured on the outside to Rowland's finicky specifications, but they're sold exclusively through the company's own catalog, which is mailed to 16 million households; only the books are available in stores. To ensure that phone agents represent the company and its products properly, Pleasant Co. uses its own people; customer reps receive two weeks of special training before taking their first order. The company, which sold $44.3 million in products in 1990 and is aiming to finish this year at $70 million, has received numerous offers from bigger companies for licenses to its characters. But despite these opportunities, it's not the direction Rowland wants to go. "We're trying not to be a fad," she says. "I'd rather have a business that's deep and narrow than shallow and wide."

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Becoming Consultants, Not Just Technicians

American Teleconferencing Services

Overland Park, Kans.

#157

Nowadays, it's not that difficult to link up a few dozen telephones scattered around the globe. "In some respects," admits Robert Cowan, founder and CEO of American Teleconferencing, "the technology of teleconferencing is simple." So what enables Cowan's seven-year-old company to stand out from competitors, such as AT&T, which offer the same basic capabilities? To a large extent, it all boils down to the level of service.

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