All Over the Road

When a midwest furniture manufacturer decided to spin its trucking unit off, they remember the problems with start-ups.

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The Wieland brothers made furniture. And since it had to be delivered, they thought, 'Why not truck it ourselves?' Now they know

As a rule, Bill Ogden has no problem with bankers. After all those years he spent "in public," as he puts it, with Coopers & Lybrand, Ogden believes he has come to understand banker types. He knows how to think the way they do, how to talk their language, how to calm them down. Which is not to say that when Ogden joined Wieland Furniture as chief financial officer, a few years back, there weren't challenges. Wieland was already an $8-million manufacturer by then (on the way to $17 million today) and an alumnus of the Inc. 500 list -- well past the point on the growth trajectory where it normally makes sense to bring somebody inside to handle the books.

There had been some work to do, but Ogden was quickly satisfied, and the bankers were, too. Wieland, after all, would be any small-town bank's idea of a dream customer: a thriving family business that came to tiny Grabill, Ind. (north of Fort Wayne), in 1983 and since then has done nothing but spread wealth all over town -- making high-paying jobs for local woodworkers and seamstresses, expanding the tax base, and establishing a $2.5-million line of credit with Grabill Bank. In time, it got so that Ogden actually looked forward to the periodic check-ins at the bank. He was proud of Wieland's income statement, sure of Wieland's stability, and eager to tell the story.

But lately Ogden has been having a harder time at those meetings. The bankers have begun asking questions that he isn't confident he can answer in a way that makes sense even to him. More and more he finds himself identifying with the bank's point of view. What's strange is that the questions have nothing to do with furniture; they're all about trucking. When he meets with the bankers later on this April afternoon, they'll probably want to know why Wieland Furniture violated a loan covenant last month forbidding transfers of more than $30,000 to Wieland Transportation, a wholly owned subsidiary that leases and operates a fleet of 18-wheelers. The trucking business has been draining cash from the furniture business for the better part of a year, hence the covenant. It's almost an old story by now. March's transfer, however, was truly ugly: $48,000. How is he going to explain that?

Ogden's anxiety is rooted in a larger question with keen relevance for company builders: what happens inside a healthy, growing enterprise when it moves beyond doing what it knows best to doing something else, too? Most entrepreneurs can understand how easily that might happen. Once you're in business, it's hard not to notice new opportunities. Maybe it's an idea connected in some way to your core, a way to leverage what you already possess -- market data, expertise, untapped capacity. There are consultants who promote such leveraging, and they'll probably give you all the encouragement you need.

Or maybe the new idea is unrelated, something that has little or nothing to do with what you already know or what you're geared up for. But because of the position you're in, you see it -- it's there -- and you want to act on it. You're successful. You know how to run a business. How hard can this new venture be?

So you plunge in. And maybe it works. Maybe your managerial skills really do transfer. Maybe the new business grows and grows until it displaces the old, and eventually no one remembers, or cares, what you used to do. Du Pont used to be in the gunpowder business. Sony's first product was a rice cooker. It can happen. Moreover, there's an element of entrepreneurial machismo in pulling off such a stunt. Succeed and you lift yourself above mere products, above luck. You become like the golfer in a recent magazine ad. "Once you understand the basic swing," he says confidently, "it's just a matter of adapting it to different situations."

Alas, that has not been the experience of the Wieland brothers -- Brad, Brace, Blaine, and Blair -- in their unhappy foray into trucking. They're third-generation furniture men, these four, builders of funky, innovative designs on contract for schools, hospitals, and businesses. When they leased their first rig, in 1988, they weren't trying to muscle in on J. B. Hunt. All they really wanted was a dependable delivery option for their own product. So far, so good.

Then the truck started bringing in money for the company, which made adding more trucks seem like a smart thing to do, which led, lickety-split, to the thrilling appearance of a $3-million business-within-a-business called Wieland Transportation. Wonderful, except that in retrospect, even then (look out!) Wieland Transportation was bombing down the road, careering out of control, heading, in Ogden's nightmare, for a fiery crash.

Blaine Wieland, the sober, reflective president and CEO of Wieland Furniture, refuses to accept Ogden's fiery-crash scenario. He's learned a lot about the trucking business in the last year or so -- more than he ever wanted to know, truthfully -- and he thinks he has a handle on things now. On the expense side, he recently cut two administrative positions at Wieland Transportation and committed to turning back three tractor leases when they expire in the fall. Then he ordered John Stoller, the company's president, in off the road, where he had been soliciting new accounts, and charged him with maximizing revenues off a smaller base.

Those are meaningful steps, Blaine Wieland thinks. When the bankers find out about them, they'll relax. Ogden may fret, but he's an accountant, and that's his job. Wieland's the entrepreneur in the equation. He knows the bank won't cut him off -- not today, anyway -- and short of that, nothing it can say or do really concerns him.

No, Blaine Wieland's mind is elsewhere at the moment, on his own organization, on the price he and everybody around him -- Ogden included -- are paying for having gotten themselves so deeply involved in this nonfurniture business in the first place. There were real benefits to branching out, of course. Those were obvious to everyone from the start. What were hidden, until much later, were the costs. Or as Blair Wieland, Blaine's younger brother and the head of Wieland's core contract furniture division, frames the issue: "A lot of things can look easy from a distance. But the closer you get, oh my goodness!"

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