The deal -- a $750,000 package, payable over three years -- put Kellogg in total control. So keen was the equity issue for him, however, and so deep his conviction that YWC would prosper only if his management team were as committed to growth as he was, that he gave 49% of YWC to Johnson, Bradley, and a handful of others.
The results soon confirmed his belief. Not only was the note fully paid off in 21 months, but over the next six years, company revenues rose from $330,000 to more than $10 million, earning a ranking of #147 on the 1986 INC. 500 list of the fastest-growing private companies, and capitalizing the creation of several profitable new divisions. One of these, YWC's testing lab, recently became one of about 50 officially sanctioned by the Environmental Protection Agency. Kellogg's marketing strategy: compete aggressively for small to midsize plant contracts; provide innovative services; and respond rapidly to the needs of an industry in which regulatory and legislative action can change the rules overnight. "Our whole philosophy is: identify new markets, get into them quickly, and go after markets the other guys aren't too interested in," he avers.
Kellogg's competitiveness made him set tough goals for himself as well as his company. And from an early age, one of those goals was to make money. The eldest of six children, he grew up in a working-class family in western Massachusetts and resolved "to have a better life." He was a high school basketball star and the only one of his siblings to go to college. At the University of Massachusetts at Amherst, he earned a degree in civil and environmental engineering. At Cornell University, on full scholarship, he studied environmental engineering and business administration. His strategy of combining technical training with business exposure proved prescient, for the environmental-engineering field was just getting ready to explode, and there was little business expertise out there to exploit it. There were engineers and operators, yes, but they weren't necessarily businesspeople. There were businesspeople, yes, but they didn't necessarily have a feel for how the systems worked.
Kellogg had a feel for both, and it was at Roy F. Weston Inc., a West Chester, Pa., consulting outfit, that he got a chance to apply his curiosity most fruitfully. Hired in 1973 as a project engineer, he rotated among different departments. For stretches of 8 to 10 months, he worked in process engineering, detail design, and -- "the real eye-opened," he says -- start-up and operations. There he met Charles Moore.
"Charlie was a [plant] operator," recalls Kellogg. "Even though he lacked engineering training, he was one of the best operations guys they had -- the type of guy who knew more about how the systems worked than the designers did. Charlie was a quality nut. He was absolutely obsessive about detail. But he was also real personable. Charlie and I became friends -- not real close friends, but friends."
"Dad was a perfectionist," adds Brian Moore, 23, almost a year after his father's death. "Really, he was something beyond perfectionist. It sort of goes back to where he came from. He left home when he was about 14 with just the shirt on his back. He and my mom had me when they were both 16. Dad worked hard to get where he got; he earned everything he achieved the hard way. And if a tough challenge came along, it only made him try harder."
The bond between Kellogg and Moore was a fairly natural one. Like Kellogg, Moore had grown up poor in a rural community -- in his case, Honey Brook, Pa. And like Kellogg, he had married at a young age and was motivated by a desire for money and the "better life" it would bring. Quite unlike Kellogg, however, Moore had never gotten a chance at a college education and had little firsthand knowledge of basic business skills. What he did have, all the more impressive in Kellogg's eyes, was the raw nerve to go out and start his own company.
Moore actually did it twice. The first phase lasted from 1966 to 1974, during which his consulting firm mostly served clients such as townships and trailer parks. Moore proved himself as skilled at the technical end of plant operations as he was lousy at running his receivables. He sold contracts with convincing ease, yet the fundamentals of bookkeeping and personnel management utterly eluded him.
"Charlie was always pretty aloof," says Dan Hudson, who worked for him in both incarnations of the company. "He never shared any information with any of us, and even people who went way back with Charlie had difficulty getting in to see him. They used to sit in the reception area and try to catch him on the way out the door. Charlie started out in a pickup truck, you know, and I don't think he ever got too comfortable being in the business world."
One of Moore's mistakes, adds Hudson, was the way he structured his consulting contracts. Instead of charging a flat fee, payable up front at the beginning of each billing period, he waited until the work was done. "That meant," says Hudson, "he'd do the work, bill a client after 30 days, wait another 30 days to get paid, and then wonder why there was thie 60-day delay in his cash-flow cycle. For a guy who was fanatical about detail, the messiness [of his business] really drove him crazy."
If not crazy, then at least back to Roy F. Weston. In 1974, Moore shut down his consulting firm and returned to the relative security of his old operator's job. It was here, a year or so later, that he hooked up with Kellogg, who in casual conversation would mostly hear negative things from Moore about his small-company management days. He complained about "the bullshit factor," the drudgery of bookkeeping, and the tedium of dealing with lawyers. Victimized as he was by lack by experience, though, Moore also came to suspect that he might have been in the right business after all. He just might have gotten into it too early. So, in 1978, Moore decided to go out on his own all over again.
