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International Profit Associates has become a $100-million company by selling $20,000 consulting jobs to thousands of small businesses like yours. But before you let IPA into your company, there are some things you might want to know
When John Burgess talks about his life, he favors a metaphor about climbing mountains and falling off them. Figuratively speaking, he's done more than his share of both. Last year, at his company's lavish Christmas party in a ballroom of the Hyatt Regency Chicago, he looked as triumphant as a climber atop the Matterhorn. Burgess is the head of International Profit Associates, known as IPA, a management-consulting company based in a Chicago suburb, and the black-tie affair -- billed in IPA's ornate invitations as its "Ninth Annual Celebration of Success" -- punctuated another year of impressive growth for the business. Indeed, as Burgess exulted that night to anyone who asked, IPA's revenues were on track to hit $105 million in 1999, up 44% from the year before.
What better evidence that IPA had reached another pinnacle of success than the eight-piece orchestra at the far end of the glittering ballroom, the hors d'oeuvres of shrimp, crab, and sushi, and the dinner of filet mignon and lobster tail?
The better evidence was at the head table in the jaunty figure flanking Burgess: former president George Bush. The two men presented a striking contrast. On one side was the stocky, saturnine Burgess; on the other the trim, patrician Bush, his lopsided grin radiating congeniality.
Bush hadn't come cheap. His fee, according to Burgess, was $82,000, or roughly $1,800 for each of the 45 minutes that he spoke. (Bush was on hand earlier to pose for photos.) For his money Burgess had the pleasure of hearing the 41st president of the United States crack a few self-deprecating jokes ("I'm delighted to speak before dinner, because if the broccoli comes out, I'm getting the hell out") and hail IPA. "When I was asked to come celebrate the success of this company," Bush told the crowd, "that was a gimme, as they say in golf."
Showcasing Bush as a speaker at IPA's Christmas gala meant "instant credibility" for the company, Burgess said -- although Bush was not the first former public official to lend luster to IPA's reputation. Gerald Ford spoke at the company's Christmas party in 1997, and Bob Dole was the keynoter in 1998. Lining up a speaker of that caliber wasn't easy, Burgess explained. "My God, we work on it a year ahead of time," he said.
In the midst of all the hoopla, Bush conceded offhandedly to his audience of about 500 people that he had done only "a little homework" on IPA. I, on the other hand, had by then done a lot. I'd begun in October, after Inc. received an irate phone call from an IPA client, Robert Goldstone .
Along with his brother, Goldstone owns Karnival Sports Center Inc., a Brooklyn clothing jobber specializing in the custom embroidery of athletic uniforms. The brothers had had a billing dispute with IPA. To pressure Karnival into paying the $19,700 balance owed for consulting services, someone whom Robert Goldstone believed to be an IPA employee had been speed-dialing Karnival's number, clogging the company's six phone lines and unleashing obscenities at anyone who answered, according to Goldstone. He says he howled to higher-ups at IPA, to the New York City police, and even to the FBI.
Other scalding complaints from IPA clients filtered into Inc. From the owner of an auto-body shop in West Babylon, N.Y., came a second allegation of an IPA telephone blitz in a dispute over a bill payment. The co-owner of a roofing business related that she had sent two IPA consultants packing after one day, concluding, in her words, that "nothing they gave us was of any value, period." The aggrieved clients were turning to Inc. because IPA had appeared on the magazine's list of the nation's 500 fastest-growing privately owned companies -- ranking eighth in 1996 and ninth the next year -- something IPA aggressively promotes in its sales and marketing. Even the business cards of IPA's consultants bear the Inc. 500 logo.
By the time of Bush's Christmas appearance, I had looked into accusations from several of the company's clients and former employees, and reviewed hundreds of pages of IPA-related court papers and other documents. I'd begun to see a dark side to IPA as I uncovered details about Burgess's checkered past as a disbarred lawyer, as well as the claims of some of the company's clients that it had behaved deceptively and abusively. But all of that couldn't have seemed more far-fetched, even surreal, on that celebratory night. As Bush flashed a thumbs-up and ducked out of the ballroom through a kitchen door, I asked myself which image was accurate. Was the fast-growth phenomenon that was IPA a compelling argument for caveat emptor or a success story worthy of the former president's benediction?
Two days after the party I drove from Chicago 30 miles northwest to IPA's headquarters, in sprawling Buffalo Grove, Ill. Seemingly thrown up the night before on somebody's cornfield, the company's red-brick-and-glass headquarters is but one of many low-slung, glossy new office buildings in the area. Burgess greeted me in his spacious office, which he calls Grand Central Station, and told me he had been at his desk since 5:30 a.m. He works long hours, and his schedule defines the company's work ethic -- employees arrive and leave in the dark "like vampires," in the words of Dan Drugan, IPA's sales chief.
