Life in the Fast Lane

Highlights from the annual Inc. 500 conference.

Highlights from our annual Inc. 500 Conference

Once again, it was an occasion for dispelling preconceptions. "I expected to find a lot of companies built around novel ideas," Pennsylvania secretary of commerce Andy Greenberg told me at a reception on the second night of this year's Inc. 500 conference in Pittsburgh. "I'm amazed that so many of them have built their businesses by doing a terrific job of executing very ordinary ideas." Meanwhile, many of the Inc. 500 CEOs were expressing surprise of their own -- at the beauty of Pittsburgh and its extraordinary transformation from a stronghold of the Old Economy into a bastion of the New.

This year's conference featured more than 30 sessions led by distinguished chief executives, business observers, and experts, on everything from employee education to going public to a spouses-only roundtable on the hazards of being married to someone who's married to the business. But we skipped the softball game between the Inc. staff and Inc. 500 CEOs. Last year they beat us 19 to 11. This year we accepted an invitation from the Pittsburgh Pirates to attend a party and watch a game against the Atlanta Braves at Three Rivers Stadium. The home team won, 4-1.

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"I've matured a lot since I first made the Inc. 500. I used to spend every waking hour trying to conquer the world. I still want to conquer the world, but now I'm working on it part-time." -- Norman Brodsky, founder and CEO of Perfect Courier (#47 in 1984)

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An exchange between a conference attendee and speaker Jerry Ehrlich, winner of the 1992 Entrepreneur of the Year Award and CEO of Wabash National, in Lafayette, Ind.:

Attendee: "What would you say is the crucial difference between an employee-training program that works and one that doesn't?"

Ehrlich: "The sincerity of top management."

Attendee: "But how do people know you are sincere?"

Ehrlich: "Because we spend 10 times as much on employee education as we do on advertising."

Upon their arrival in Pittsburgh, Beverly and John Zeiss of Critical Care Associates (#52 in 1991), in Montclair, N.J., were greeted by a Pennsylvania official eager to get them interested in contributing to the state's economy. "We already contributed to the Pennsylvania economy earlier this morning," replied John Zeiss. Seems they had been nabbed doing 95 miles per hour as they crossed the state line in their Porsche 928. For the record, Beverly was driving.

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"Flying a plane is the only time I ever put work totally out of my mind. There's something relaxing about knowing you'll get killed if you don't focus your mind on the matter at hand." -- Eric Kriss, founder of MediVision (#35 in 1989) and CEO of MediQual Systems (#57 in 1988)

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For the third year in a row, we heard a lot of talk about the changing attitudes of entry-level employees. It pays to be skeptical of one generation's judgments about another, but even the youngest chief execs at the conference (some have yet to see the far side of 30) said they thought that kids coming out of college today are less motivated and less interested in getting ahead.

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"Most people sell their business at absolutely the worst time. Running a company that's doing well is just too darn much fun -- why would anyone want to give it up? But this is exactly when you should think about selling. How are you going to sell a sick dog whose founder doesn't even want to run it any longer?" -- Max Carey, founder and CEO of Corporate Resource Development (#395 in 1987)

Something old: The perennial problem of bringing professional managers into a young growing company. One founder referred to his "$3-million mistake" of turning over the reins to a big-company manager. Another described how his company almost went bankrupt when a newly recruited president from Westinghouse decided to revamp the business. Both founders admitted they felt intimidated by the language, formal training, and confidence of big-company execs. "It took me a while to realize that big-company people with their M.B.A.'s often don't understand the fundamental rules of business," one of the founders noted, "like making sure your sales are greater than your expenses."

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Something new: A growing sense that some form of equity participation is essential to a company's long-term success, the inherent risks notwithstanding. Dennis and Michele Flynn of Heritage Asset Management Group (#407 in 1991) told us about their experience in sharing equity with three key managers. One of the arrangements went sour and got the company embroiled in extended litigation. Do the Flynns have any regrets? "Yes, we regret we didn't have a better shareholder agreement."

"At Wabash, everybody sinks or swims together -- everybody, even our salespeople. They aren't on commission. They participate in the same compensation system as everybody else." -- Jerry Ehrlich, CEO of Wabash National

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The folks from American Teleconferencing Services (#157 in 1991) came loaded with imaginative ideas about motivating employees. Our favorite: with every W-2, the company sends out a one-page accounting of what it spent on the employee in addition to wages or salary -- including the cost of company parties and outings, gifts, health insurance, training, and special perks.

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"On busy days in our telemarketing centers, I bring in buffet lunches, so people don't have to get up from their stations to go to lunch. But I haven't yet gotten them to accept the catheter idea I proposed." -- Jim McCann, CEO of 800-FLOWERS

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Talk about virtual corporations. When it comes to managing people, Dick Weigen couldn't care less. Three years after first appearing on the list, Weigen's $3.5-million Corporate Book Resources (#275 in 1989) remains the only Inc. 500 company with no employees.

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The hottest markets in the world today, according to Jeff Ake, vice-president of sales and marketing of Electronic Liquid Fillers (#194 in 1988), which derives more than half of its revenues from international business: Korea, Hungary, the United Kingdom, and China.