Now instead of selling itself as "the technical school offering state-of-the-art equipment" -- a claim that presented no added value to potential students, Riordan had long argued -- UTI touts that "it receives more job opportunities each year than it has graduates." An impressive credential to a customer who thinks getting the job is job one.
For the first time Riordan, along with the vice-president of sales, conducted a formal study of UTI's competition. And less than a year after the turnaround, sales for the first three months of this year were up 24% over the same period in 1994.
Some board members had an immediate bottom-line impact. Ed Walsh's work for a local hospital sparked the idea that UTI save car shells that have been emptied of their engines and other mechanical parts and sell them to rehabilitation hospitals so recovering stroke victims could use them to regain the dexterity to open a car door or turn on an ignition key before hitting the open road. With each shell going for $8,400, says Hartman, "it's a perfect example of creatively squeezing additional revenue out of existing business." Similarly, George Aucott obtained a spare diesel engine for students to work on -- saving UTI $22,000.
Not that it's all been painless. In just three meetings the advisers have slaughtered their share of sacred cows. The first was UTI's sales expenses -- a whopping 26% of total revenues. "I nearly fell over when I first heard that number," Young declares, adding, "that number can't be maintained." The managers disagreed. Their arguments ranged from "You have to spend money to make money" to "That's always been our number."
Delving further, the advisers' collective eyes stopped at "the visitation program" sapping $400,000 annually. Every year 700 high school instructors enjoyed a nearly-all-expense-paid visit to UTI to tour the school and learn about the latest courses. The board wanted to know what numbers supported the value of the program. "I got a little defensive," Hartman confesses. "But then I realized that if it's working, there should be empirical evidence to back it." By tightening its requirements, UTI saved some money almost immediately.
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Scenes from the Boardroom
To keep the board running smoothly, Hartman clings to some simple rules. At each meeting he schedules the next three meetings. He sets down each board member's paycheck where he wants that person to sit, making sure that the advisers don't sit next to one another but mingle with his own management. He begins and ends each meeting on time, and he plans lunches with each of the advisers between meetings. Ed Walsh verifies that those get-togethers are hardly social. "With all Bob's questions, I've found that it's best to order a salad; otherwise I'd never get a bite in," says Walsh.
As for the question of losing control, Hartman insists everything is a trade-off and "the potential for negative scrutiny is far less daunting than the risk of living in a vacuum when you do business in the real world and you don't have all the answers." Besides, he says, the board's focus is on strategic areas, and although some of its initial impact has been on tactical fronts, it will never fret about day-to-day issues.
That makes Hartman's managers breathe a little easier. "Nothing the board suggests is pushed down our throats," says the vice-president of sales, who adds that after each quarterly board meeting the managers gather to hash out which of the board's suggestions can actually be implemented. Individually, the advisers and managers are banding together -- whether it's Richard's supporting Kim Riordan through her marketing turnaround or Ed Walsh's reworking Jeff Muecke's sales presentation. Relationships are developing. "You should see Shirley's eyes light up when she sees Kim," Hartman declares. "Those two get a charge out of working together." Rather than fretting about the power lost to the advisers, the managers are beginning to appreciate the power to be had.
Of course, it's early. The tests for the managers and Hartman alike are down the road, and maybe not too far. Martin Walsh, for one, confesses that he's not happy to see how fast and hard some advisers are pushing UTI to change, particularly for a new strategic direction. He cautions, "Unless the company is in crisis, it's not our job to push Hartman before he's ready."
For now, though, only three meetings into their partnership, Hartman worries most about keeping the freshness alive, capturing the attention of his high-rolling sounding board, and not slipping into the sleep-inducing tedium all too common in boardroom meetings. He stages every meeting a little differently. At one an adviser showcases his vision of UTI versus the competition. At another Hartman and his vice-president of operations conduct a mock debate on future growth strategies for UTI. Hartman even varies the setting -- sometimes the group gathers at his home. "It's a little like a marriage," he muses. "You can court well, but the real job is keeping them interested."
At this point Hartman sounds like a happily married man: "It's absolutely the best decision I could have made," he says. "Sure, it's been disruptive to the staff, and it's created more work for me, but the contacts we're building are priceless, and the growth and stimulation are exactly what the company needed and exactly what I needed . . . but talk to me again in two years."
