Still, Hartman isn't resting easy. His problem is not short-term -- UTI's revenues in 1995 will climb to $34 million, with operating profits hovering around 9% -- but long-term. "There are a lot of forces at work that could cause us trouble," he says. "Nearly a third of the schools like ours have shut down in the last five years. How do I keep ours from going that way?"
Like many vocational schools, UTI has many students who are unable to afford the school's tuition, which at UTI is $10,000. Typically, they come from families in which the total annual income hovers at around $22,000. Students applying for government-backed loans and grants make up about 75% of UTI's revenues, a dependence that makes Hartman uneasy. There's also new competition. Local community colleges are adding technical-training courses, subsidized by manufacturers such as General Motors and Toyota, at a third of UTI's tuition.
What's more, Hartman doesn't have a lot of wiggle room to reduce tuition, since UTI is supporting three campuses, and labor expenses are approaching 55% of revenues.
If Hartman was depending on his homegrown management team for a blueprint for survival, he was due for disappointment. Most of the 13 staff directors had been with UTI for 10 years or more -- some for all their professional lives. Like Kimberly Riordan, the director of marketing, who started as the school's receptionist in high school, all shared a fierce passion for UTI but an inability to break away from the old thinking. "We were too inbred to help Bob," she admits. Meetings called to talk about the future degenerated into discussions of the next day's problems. "I couldn't get people to look beyond the trees," Hartman says.
That was when he decided to enlist the help of people who didn't even know about UTI. "I needed a fresh perspective and some mentoring for me," he explains.
There was just one problem: Hartman wanted people he didn't know. "So if I didn't know them, how was I going to find them?" His answer was Susan Shultz of SSA Executive Search International. For a price tag of $20,000, Shultz agreed to comb the country for candidates.
Shultz and Hartman agreed that UTI needed to look for four different kinds of people: first, a strategic thinker to help draft a long-term business plan; second, a marketing expert for help on direct mail and infomercials; third, an industry veteran to help the school with the curriculum, resource issues, and industry contacts; and fourth, a human-resources expert, since more than 50% of UTI's costs are personnel related.
Plugging into her database, Shultz threw a wide net: in one case, she called 90 candidates for one post. After an initial lengthy phone interview, she'd follow up with a letter presenting an overview of the board and the company, and then another phone call. Most candidates, Shultz explains, were intrigued. Fewer than 10% rejected the idea outright.
To Hartman, hiring Shultz was money well spent. He didn't have the expertise and, more important, he didn't have the time. "I already work a 60-hour week," he says. "I wasn't about to add four hours a day making phone calls."
* * *
The Search
Once prospective board members arrived at UTI's Phoenix campus, Hartman knew, they were not likely to be immediately won over. This was not the sleek, sexy site of the next biotech breakthrough. With 110,000 square feet of brick buildings enclosing a labyrinth of drab classrooms, there wasn't much to distinguish one room from the next -- except for the occasional carburetor or valve or transmission off to the side. No brightly colored posters announcing the next school dance decorated the hallways.
Appearances aside, Hartman also had to counteract other misperceptions visitors might have brought with them. "Many people still think of schools like UTI as stuff advertised on the back flap of a matchbook," Hartman observes.
But Hartman refused to do the hard sell, preferring that the candidates size up the business for themselves. He was prepared with a list of questions he kept tucked away in his coat pocket: To whom do you, as a board member, have an allegiance? What have you been able to achieve as a director for other companies? What role would you like to play? What committees would you like to serve on? What specifically will you contribute to the board? Good questions. But the real answers for Hartman lay in the glimpses he caught of the deeper, unspoken motivations of his candidates.
Motivations like those of a former vice-chairman for international operations at Kidder Peabody International, who kept steering the conversation toward the question of taking UTI public. Hartman worried that the investment banker was looking to earn a commission. "I wondered if we'd be operating from the same agenda," Hartman says. Another candidate spent most of his time questioning the adviser fees -- pressing Hartman to up the proposed fee from $1,000 to $2,500 a meeting. "He was just looking for additional sources of income."
Utterly different was George Aucott, the 60-year-old chairman and CEO of $500-million Motor Coach Industries International Inc., a bus manufacturer, who barraged Hartman with so many enthusiastic questions about UTI that the tour actually went overtime. "It's thrilling," says Aucott, "to see all these kids who would normally fall through the cracks getting an opportunity to do something meaningful with their lives."
