Bob Klein, Andover's vice-president of sales, says that once the management understood it was competing with a host of "black-box companies," it rewrote its story to differentiate the business. The competition sold its product through large electrical contractors, the cheapest and most direct route to the construction market. But that channel offered a crude solution: energy-management systems that were little more than add-ons to a building's electrical system. Andover recast itself as being in the "comfort business." It began selling through distributors that specialized in temperature-control systems. It paid a higher price for more-specialized access to the market, giving up margin to those distributors who understood its products. But since Andover's products were better integrated into the overall mechanics of office buildings, the company surpassed the competition, and the business took off from there.
Stories that reflect a recognition of the truth that drives a business can retain their vitality, even as the market evolves. Today Andover Controls remains in the comfort business, but its management has redefined what that means. The company increasingly integrates its products into "intelligent" buildings, in which security, mechanics, electronics, and electricity are tightly interwoven. That awareness has guided an approach to the market that depends even more on specialized distribution and strategic alliances with other vendors. Of the 350 "black-box" manufacturers that sprang up in the late '70s, Klein says, there are no more than 40 still in business. Andover Controls, with $60 million in sales in the United States and Europe and now aggressively expanding in Asia, is among the five largest.
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The point of view: space for the listener
Good stories fire the listener's imagination. They draw people in and include them in the storytelling process. That describes what happened at Rocky Mountain Motorworks, in Woodland Park, Colo., a distributor of aftermarket parts for German cars, when founder Chris Nowak recently set out to recraft the company story.
Nowak started the business 10 years ago, and as of last year it had grown to $6.2 million in sales. But Nowak wanted to broaden Rocky Mountain Motorworks' possibilities, and he needed a new story that would reflect that greater potential.
He seized upon the idea of offering a lifetime warranty on all parts. What made the new story so effective was that just about anyone listening would be affected by it. "We said to our vendors, 'We need certain things from you," he recalls. The company set up a vendor-evaluation program that tracked every part that came through the door and ranked the vendors according to the number of defective parts each had shipped. At the end of the year, says Nowak, "we let them know where they stood. I told them I expected to recover 100% of my costs due to returns." For Nowak, it took a fair amount of coaxing and cajoling to get his vendors to come around to the idea. They worried about being measured against -- and played off -- one another. But Nowak offered them higher margins and the prospect, too, of higher sales.
Nowak then went to his employees, who knew that the lifetime warranty would put pressure on them. It required stepped-up tracking of defects and meant they needed to get same-day orders out the door -- even after 5 p.m. "I told them that this was how things were going to change, but I wanted them to make the final decision on how that would happen." Some employees feared customers would take advantage of the company by sending back perfectly good parts they had already used. But Nowak had thought the story through. "I said, 'We are not going to base our policies on the 1% of the people who are dishonest.' I told the employees, 'We are not buying business. We are selling service and value."
Nowak believes that updating Rocky Mountain Motorworks' story by including vendors and employees in its shaping "has built confidence in what we're doing." He adds that revisiting the company narrative is "an exercise every company should go through every two years."
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The storyteller: crazed but not crazy
Author Mark Helprin believes that every good company requires a strong personality and a credible narrator whom people will want to listen to -- but one whose passion also allows them to suspend disbelief. Helprin asserts that a good storyteller "can't help himself." The passion comes through. He or she becomes the vessel in which an urgent story wells up and must be told.
Bob Metcalfe, the founder of 3Com, in Santa Clara, Calif., seems to be a cool, measured sort, who nonetheless will quickly volunteer, "I view my life as participating in a technology crusade." In his pilgrimage to the holy land, Metcalfe met another man of faith, Dick Kramlich. Kramlich knows a profitable story when he hears one. "The idea has to change things in a big way, and the entrepreneur has to be evangelical about his idea. I'm looking for someone who's crazed, not crazy." Kramlich is a partner at the San Francisco venture firm of New Enterprise Associates. In the past five years, he has taken 64 of his high-tech investments public, including some of the brightest stars in the Silicon Valley firmament: Ascend Communications and Macromedia. Eight years ago he backed a then newly public computer company called Silicon Graphics Inc.
Moved by Metcalfe's passion, Kramlich grasped the central truth of 3Com's story. "It made enormous sense to me that personal computers should share resources," he recalls. Metcalfe was selling a lowly-looking piece of hardware, a printed circuit board called an Ethernet adapter that had failed to excite most other investors. But in Metcalfe's rendering, that board suggested an epic in the making. He communicated his belief that the pace of progress in computing had been held back by the lack of compatibility between machines. If someone could create a standard for linking computers, the value of the link would explode once a critical mass of connections had been reached. Metcalfe, an MIT graduate, even expressed the idea in a mathematical formula that the writer George Gilder would later dub Metcalfe's Law. Says Metcalfe, "I was selling not the board but a standard."
