The Power of Listening

How does an old-line manufacturer in a stagnant industry manage to grow 25% a year for 10 years? By taking its employees seriously.

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In the beginning was the Dream, as is the case with most entrepreneurial ventures, only at that stage it wasn't too grandiose. "Seven years and out," says Paul Centenari. Buy the company, fatten it up, sell it.

Not long after came the nightmare. What had been a tidy, profitable little business when Centenari and his brother Peter bought it was suddenly a charter member of its bank's workout group, one step this side of bankruptcy. The Centenaris were on the hook personally, big time. "I'd come home and look at my house and wonder, 'Will they take my house?" says Paul. "I'd look at my wife and wonder, 'Will they take my wife?" He smiles wanly at the feeble joke. It wasn't a funny time.

But when they woke up from the nightmare, the company finally back on its financial feet, the Centenaris had a revelation, which is to say that they began to dream a different kind of dream altogether. Wait a minute, they told each other. We can do this. We can start with a tiny company in a hardscrabble nickel-and-dime industry and build it into a billion-dollar business. We'll expand our existing plants. We'll scarf up competitors. We'll learn to do things that nobody else can do.

If this were a movie trailer, the music would be swelling. Oh, and one more thing. We'll show the world there's a different way of running a company -- a better way. We'll open the books. We'll share ownership and help everybody get rich. Hell, we'll build a democracy! We'll have our people vote on how to spend the company's money.

Okay, so it wasn't exactly an all-at-once epiphany. Life is not the movies. But however it evolved, the Centenaris today do have that dream, and they do have a nickel-and-dime manufacturing business that has grown almost 25% a year for 10 years, is now up to nearly $70 million, and shows few signs of slowing despite a dismal economic environment. And, yes, the business, Atlas Container Corp., is indeed a company that operates like no other company most of us are likely to bump into -- votes and all.

Which is probably a good thing, because if you don't do something different from what everybody else is doing, how on earth can you hope to succeed in a down-and-dirty industry like cardboard boxes?

If a person just sort of stumbled across Atlas Container, the first question he or she would no doubt ask is, what were a couple of good-looking, well-connected Harvard Business School graduates even doing in a place like this, "this" in the first instance being a sprawling early-1960s-vintage corrugated box plant on a two-lane blacktop in Severn, Md., and "this" in the second instance being the box business itself, as brutal an industry as you'll find anywhere. It's a market in which a few big dogs (such as Weyerhaeuser and International Paper) and a kennel full of smaller ones scrap over a $2,500 order, and if you consistently make 5 cents on your sales dollar, you're doing very, very well. "It's a bottom-feeding business," says one of Atlas's customers bluntly.

But it turns out, of course, that those onetime Harvard kids are pretty tough themselves. And that something like the box business is exactly what they wanted.

Peter and Paul Centenari grew up in the tony Boston suburb of Wellesley. The two are only 13 months apart in age. (Peter is the elder, though it's Paul who serves as the company's CEO.) They went to fancy New England colleges -- Tufts and Dartmouth -- before getting business degrees at Harvard. Still, we're not exactly talking the tea-party set here. In college Paul took up boxing, eventually joining the Golden Gloves circuit. In 1981 he flattened one Jim Fox in the first round of a Massachusetts 178-pound tournament, a scene captured in a Lowell Sun newspaper photograph and thoughtfully captioned "Bye, bye, Jimmy." Enlarged, it hangs for posterity on Atlas's conference-room wall.

The brothers' first excursion into entrepreneurship, a boutique investment bank in Colorado, was, well, unsatisfying. "We wanted to get into an honest business," says Paul, leaving the implication about the ethics of investment bankers hanging in the air. More specifically, they wanted a business that was low tech and off the beaten track -- in other words, one that was undercapitalized and undermanaged, where a couple of bright M.B.A.'s could add large amounts of value and then sell out for a bundle. Cardboard boxes? Perfect. They wrote to 450 box company owners to see who was interested in selling. They visited 23 and made an offer on one. Atlas was "beautiful," says Paul, a profitable, debt-free business. The brothers bought it for $3 million. Paul was about to turn 32; Peter was just 33. The year was 1988.

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