Blowup

The saga of a partnership gone bad

There's no uglier spectacle in business than a partnership gone bad. Usually such dramas play themselves out behind closed doors, with everyone involved too scared -- or intimidated -- to go public with their story.

"Blowup" provides a rare opportunity to go behind the scenes of a business -- founded with the best of intentions, built on the trust and energy of equal partners -- whose future hangs in the balance as the partners wage their own personal war. -- E. O. W.

When Jim Eme walked into the building on a Monday morning in July 1987, he was met by a roomful of empty desks and a pile of resignation letters thrust through the mail slot and fallen to the floor. Over the weekend, six of his eight salesmen had stolen into the company and cleaned out their desks while co-workers mingled at the company picnic. Gone, Eme says, were customer lists, price lists, and valuable parts diagrams that Illinois Computer Cable (ICC) had painstakingly assembled in five years of business. Even calculators and staplers had been swept off desks. The place was barren, as empty as the feeling in Eme's gut. The company he had founded was dead.

John Berst, ICC's president, was over in the administrative offices, in a one-story brick building on what had been in more innocent times a rolling stretch of midwestern prairie, since transposed into suburban Chicago industrial parkland. When Berst's phone rang that morning, Eme was on the other end saying, "John, you'd better get over here right away." Then he told him what had happened. Berst thought he had exorcised this demon earlier in the year when one of ICC's four partners, Bob Ohlson, angrily left the company, unable to gain the control he felt he needed to run it. Eme, Berst, and ICC's fourth partner, Ralph Dote (pronounced DO-tee), had come to see Ohlson as a man on an increasingly vicious power trip. They wanted him out.

In March 1987, when Bob Ohlson left ICC, he did not go gently. Rather, he kept reappearing like the ghost of Hamlet's father, warning darkly of things to come. One day in April he showed up at ICC at 7:00 a.m. to tell bleary-eyed factory workers that he had not resigned, he had been fired. In June he barged into an operations meeting at a local restaurant, haranguing Berst for "sticking a knife in my back." He next arrived on the doorstep of Ralph Dote, who was about to move into a new house nearby. When Dote's wife came to the door, Ohlson warned her that bankruptcy court would be the couple's next address; the company would fail if he and Ralph did not wrest control of ICC.

About the only thing left in the sales office that day in July was a business card for a nearby company that Berst had never heard of: Cable Comm Technologies Inc. When Berst called Dun & Bradstreet that afternoon, his worst fear was confirmed: Cable Comm's president was one Robert Ohlson. The renegade company, as it turned out, had formed amidst the fear and loathing that swirled around ICC in the spring of 1987, well before the mass defection of July 20. Unbeknownst to Berst, Ohlson had been planning this coup for the past four months, summoning his loyalists inside ICC to evening meetings at his house.

Ohlson had taken 18 of ICC's 80-odd employees with him, including three-fourths of the sales staff in a sales-driven business. He beheaded ICC and, not pausing at that, proudly displayed his prize on a pike. "I could have wiped out the whole organization if I had had the money," he recently boasted, sitting in his new office. This was sweet revenge for the betrayal Ohlson felt he had suffered at the hands of Berst.

It was Berst, however, who had felt betrayed as he closed his office door that July morning and tried to center his thoughts. His first call went to his banker, who, after listening to his plight, said, "Tell me, John, what sort of forecast do you have for July?"

Berst replied, "Look, I don't even know what I have left here."

The Founding
Illinois Computer Cable Inc. began life five years earlier in Downers Grove, Ill., with an act almost as startling as the coup of July 20, 1987. Jim Eme, fresh from vacation, returned to the cable company he worked for at the time, Tel Com Products Inc., to find someone else sitting at his desk. Eme, 36, had been Tel Com's sales manager; now, he was being demoted to salesman. Eme had worried that it would come to this. As Tel Com had grown, its founder's ego had kept pace. The running joke around the office was that every time the ashtray in the boss's car filled up, he bought a new car. Morale was in free-fall. Tel Com was in the process of phasing out its in-house sales staff and going to outside sales reps. Eme knew he had to get out, and in August 1982 he did, founding Illinois Computer Cable in the basement of his house.

On his way out at Tel Com, Eme had tried to get Ralph Dote to join him. Eme had faith in himself as a marketer, but he needed a younger man's energy to hook his talent to. Dote was 31, Tel Com's star salesman. For two years he had sold more than $1 million worth of cable. He was making 50 grand a year, not bad for a young guy without a college degree. Eme had warned Dote that even he would get his comeuppance at Tel Com. Dote scoffed at the thought. "I told him, 'Jim, you're crazy. What can they do to me? I'm their best salesman.' He said, 'Ralph, you wait. You'll see.' "

Eme's warning proved prophetic. At Dote's next salary review, it was proposed that his base pay be lowered and his commission percentage cut. By January a disillusioned Dote had joined Eme.

Dote's mentor at Tel Com had been Bob Ohlson, 20 years his senior. Ohlson joined ICC in February and then persuaded his partners to hire John Berst, 41, away from Tel Com as ICC's chief financial officer. Eme, Dote, and Ohlson made a 10% share of ICC available to Berst. Four men, embittered by life at one company, left to form a new one. This time, they vowed, things would be different.

The 'Weak Link'
Jim Eme had started over at a vulnerable time in his life: children and mortgage, the ego-bruising experience at Tel Com. Now, he was president and founder of a new company, but he opted for humility. He saw himself as a partner in a business devoid of hierarchy -- an entrepreneur among equals.