At 57, John Koss is too old now for YPO, but he has become a popular speaker on the management group circuit. A master storyteller, he recounts the saga of his descent into the purgatory of Chapter 11 cheerfully, with as many cliffhangers as The Perils of Pauline and as many trials as Job. "People ask me how it felt," Koss jokes, "and I tell them about getting an enema from my palsied Aunt Tilly."
Two years after emerging from court protection, Koss Corp. is hot again, just as its founder had promised. In June 1986, Koss introduced a cordless headphone, followed in early 1987 by four new models of stereophones and, six months later, a cordless/infrared speaker that reestablished Koss as the darling of the electronics and music press. The high-end audio industry, driven by sales of compact disc players and stereo TVs, was on the move again, and Koss was in the lead. There was even a new Koss billboard to remind Milwaukee that Koss was back, same as ever. "Phone your mother," read the caption below a picture of Whistler's famous mom with stereophones over her ears.
Financially, the company has never been more stable. During the fiscal year that ended in June 1987, Koss boosted its net worth to $4.8 million, as sales climbed back above $20 million. Net income totaled $1.8 million -- a record. And once again, Koss is sharing: last year the company contributed the equivalent of one month's wages for all employees to the profit-sharing plan, and $300,000 to the employee stock ownership trust for the purchase of Koss Corp. stock.
Except for a few more gray hairs, friends and employees don't see that many changes in Koss personally since the bankruptcy court filing. He's still the cheerleader on the shop floor, the master promoter on the street, and the jokester at the country club. But he knows he's been lucky. He's gotten back everything he lost and then some. He'd hoped to leave the children a stable company -- Koss Corp. has never been leaner, stronger, or more profitable. He'd hoped to train his children to keep it growing -- now, the next generation has taken over the day-to-day, educated by five years of turmoil.
"The bankruptcy was the best thing that ever happened to us as a family," Nancy says now as her husband nods in agreement. His faith is stronger in God and in himself -- and in the boys who he has watched blossom during the past five years.
Michael, now 33, was recently named president and chief operating officer, freeing his father "for the fun stuff." Michael says he's adopted his father's management style -- results oriented with a minimum of control -- but the bankruptcy also got him in the habit of making a daily check of cash, orders, shipments, and production on his desktop PC. Michael credits Im Dodson with much of what he has learned about business -- "he taught me what not to do." He continues: "People were so scared to make mistakes, and so tired of filling out forms. It was boring and demeaning. I know now what it takes to make this a bigger company -- it takes a handful of dedicated people."
John Jr., 30, the new vice-president of sales, also feels the positive effects of the turnaround in very personal ways. "In college I was always afraid that if I joined the family business I'd feel I hadn't really earned my position," he remembers. The past few years have laid that fear to rest. Working under the demanding stare of the bankruptcy court has honed his business instincts too. I'm so sensitive to it now, I'll always be able to tell when things are going wrong."
Michael Moore, 30, now Koss's general counsel and credit manager, may be the most changed of the three. He'd never expected to work for his father-in-law or his company. But having been thrust into the breach, he was able to enjoy a level of trust and responsibility most sons-in-law could never achieve.
In the process, Moore also saw the wisdom of John Koss's open manner and egalitarian values, and when business finally picked up, he took the opportunity to translate those into personnel and compensation policies that have helped to preserve Koss Corp.'s reputation as a progressive, innovative employer.
Moore has extended regular performance reviews and merit raises to hourly workers, and twice a year sits down one-on-one with each of them. He holds regular meetings in the lunchroom to explain what employee stock ownership means, and to make sure the numbers are clear, he's added an explanation of the company's financial statements to the employee newsletter. "This is your company," Moore tells them. "You own it and make it grow -- and you earn the reward."
For his reward, John Koss likes to pick up a McDonald's double cheeseburger and a diet Coke on a crisp fall day and eat lunch, alfresco, on the site where contractors have staked out the floor plan of his new house. It will be a modest place by his old standards -- only a third the size -- built of wood and stone with a view of the river. He and Nancy set out the broad designs of the new place together, modeling it on the North Carolina home of their friends Ruth and Billy Graham.
After lunch, Koss threads his way along the paths through the woods up to his old house, to stand at the edge of the lawn and muse a bit. To this day Nancy still can't bear to visit the place, but he likes to come back now and then. The house reminds him of the man he used to be and the painful mistakes that threatened his family's future and brought his company to the edge of bankruptcy.
"I've learned there is no escaping -- if you're going to be CEO you've got to take the responsibility," he says. "I'm more cautious now, too. I had always bet everything because I didn't realize how much I had to lose."
