The Entrepreneur of the Year

Financials ($ thousands)

RUNNER-UP

Dietrich M. Gross

Mercury Stainless Corp., Wheeling, Ill.

An entrepreneurial late bloomer, Dietrich Gross spent 20 years working for other people in the steel business before launching his own steel processing company in 1973. He ran that for 10 years before resolving to turn his company, Mercury Stainless, into the country's only fully integrated stainless producer and distributor.

Lately the growth decisions have started to come faster. Next will come a European service center says Gross, himself a German native. It's not the direction that most American firms are moving in, but Gross's moves have usually violated conventional wisdom -- to his profit, we should add.

Mercury Stainless, which is 100% owned by Gross, has been consistently profitable, with 1988 sales of $190 million.

RUNNER-UP

Stew Leonard

Stew Leonard's, Norwalk, Conn.

Probably no single-store proprietor has been more admired and celebrated than Stew Leonard, who 20 years ago stopped delivering the milk his cows produced and opened a store to sell it. And no proprietor has gotten more publicity. Leonard needs a clipping service just to keep track of the books that cite him and his two-step business credo: "Rule 1. The customer is always right. Rule 2. If the customer is ever wrong, re-read Rule 1."

Tom Peters loves him. "If you really try," he said in a TV special, "you can make any product special. Leonard has proven it better than anybody I know." His store, called just Stew Leonard's, had sales of $98.6 million in 1988 -- or $2,976 per square foot, a slightly astonishing figure that's approximately five times as large as the average independent supermarket's.

TURNAROUND ENTREPRENEUR OF THE YEAR

Leslie B. Otten, Sunday River Ski Resort

There are two reasons that you can't call Leslie B. Otten a turnaround artist.

The first is that he's only done it once. For the past 16 years, Otten, age 40, has had only one job -- no, two. But both of them were running the Sunday River Ski Resort, situated 170 miles north of Boston in out-of-the-way Newry, Maine. He likes it there.

The other reason you can't call him a turnaround artist is that what he's done at Sunday River consists less of art than of dogged execution. "Les has a good grasp of the basics" is the kind of thing people who know or work for him tend to say. There has been less short-term brilliance in what he has done at the now much-expanded ski resort than long-term determination.

So maybe Leslie Otten isn't an artist, but the turnaround he has engineered on this mountain that one of the best companies in the industry abandoned is nothing short of astonishing.

Otten used to joke that he first had to ruin the business so he could buy it cheap. But he stopped telling the joke, worried that people might take him seriously. When he first took charge of Sunday River, though, it did belong to someone else.

That was in 1972. Otten, in his mid-twenties, had graduated from Ithaca College and worked a year for Sherburne Corp. (now S-K-I Ltd.), the company that owned and operated Killington Ski area in Vermont. The company dispatched Otten to run the little mountain in Maine it had recently bought, although there wasn't much to run -- a couple of old T-bar lifts -- and Sherburne, for reasons that make sense to Otten now, was stingy with expansion capital then.

"He was stuck in the back of nowhere," says Otten's wife, Chris, "and people [at Sherburne] paid little attention to him. . . . Every spring he'd say, 'We're outta here,' and we'd write up a new rÈsumÈ. But then he'd stay around to paint the chair lift." Along about 1976, says Chris, when her husband saw that Sherburne wasn't likely to do anything with Sunday River, he started talking about what he'd do "if this were my place." In the fall of 1980 he bought it the only way he could -- with virtually no money down. Sherburne took back a note for the entire $840,000 purchase price. In the fiscal year that had just ended, Sunday River had lost $240,000 on revenues of $541,000. All Otten could do was cut his costs, hang on, and plan his strategy. That winter he managed to bring the loss down 60%.

The turnaround plan Otten made for Sunday River was simple: he would concentrate on developing the product -- working on the steak, not the sizzle. In the ski business that means providing the best possible snow conditions and enough uphill transportation to get people to it and not worrying about the peripheral amenities. Other New England ski areas, says Burt Mills, now Sunday River's mountain manager, concentrated on "frills and ambience, the aprËs-ski . . . but product was our priority number one." Otten couldn't guarantee outstanding conditions, but he wanted to convince the market that on any given day skiing there would be as good as, if not better than, skiing any place else in the region.

It worked. By concentrating on improving and developing the product -- and you only have to look around to see that it wasn't on the look or luxury of his base buildings that he's spent his money -- Otten has succeeded in making a real mountain out of a sold hill. Last year Sunday River attracted 350,000 skiers, more than any other Maine or New Hampshire ski area. The first year Sherburne owned the mountain, 20,000 skiers showed up. And since 1980, when Otten bought it, only one other New England ski area besides Sunday River has recorded a similiarly unbroken growth record.