2007 Family Business Awards
Meet the winners of this year’s Family Business Awards selected by the Cox Family Enterprise Center: Blalock Machinery & Equipment, College Park; Bowen Family Homes, Duluth; Southwire, Carrollton; and Fred W. Gretsch Enterprises, Savannah
Small Company Award Winner
Blalock Machinery & Equipment
Thriving On Responsibility
By Ray Glier
Images from the past are fixed proudly to the walls in the lobby of Blalock Machinery & Equipment Co.’s College Park headquarters. One picture shows 1950s service trucks lining a downtown Atlanta street; another is a portrait of founder D.B. Blalock, Sr. In the corner, the old switchboard from the downtown office stands quietly by.
Walk through the doors into the warehouse, though, and there lies the company’s future. Spread out on the polished concrete floors are the $7,000 to $12,000 mowers the firm distributes to landscape companies.
The two eras of Blalock – founded in 1927 – are linked by Bill Blalock, his sister Mary and their sister-in-law, Susan. The company, which has 19 employees, will do more than $30 million in business in 2007.
What has driven the company for 80 years is the concept that it is not just a family-owned business, but a business for families. The relationship that’s developed between the Blalock family and its employee family has survived generations.
“It’s nice to have the Blalock legacy,” says Bill Blalock, 55, who is company president and grandson of founder D.B. Blalock, “but it is more important to have the jobs for our families and make sure this company survives for them.”
It’s why Bill’s sister Mary Blalock, 60, says her children or Bill’s children, or the son of their late brother, Braxton, will not simply be tossed the keys to the business as the next in line. There are jobs to protect – and not just the ones belonging to Blalocks.
“I have told my children to go get an education and test the waters out,” Mary Blalock says. “We have to think of the good of the whole. Just because they are a Blalock doesn’t mean they are going to be sitting in Bill’s office one day.”
The business thrives on that responsibility to employees. Seven years ago the family was distressed that workers weren’t taking advantage of a liberal matching program in the company’s pension plan. The Blalocks were willing to match contributions, but they were putting in just $17,000 in matching funds.
Bill Blalock says the family decided to scrap that program and set up a SEP/IRA with automatic contributions from the company. The pension bill jumped to $138,000, but the peace of mind for employees moving toward retirement was priceless.
“Two things I told people when they left here: I wanted them to have a nest egg and I wanted them to learn how to manage the money,” Bill Blalock says. “We try and do a little more for them than we have to, such as trying to keep health insurance deductibles down. When you look at a family with two kids, the deductible hits them four times.
“When we are making decisions like this there are a lot of times when I think back how my dad would have done something.”
The pension plan decision was one of the key decisions Bill has had to make since he was thrust into the role of president following Braxton’s death from cancer in 1998. It was Braxton who assumed control of the company in 1976 when their father died and guided it through the transition. It is Bill who is continuing to shape its future.
Both Mary and Bill agree their brother deserves a share of the credit for the company’s success the last 10 years. One of Braxton’s key contributions was “Demo Days” for professionals who use the equipment. Instead of sending out sales representatives, Braxton and his wife, Susan, would trailer the equipment themselves and invite end users to designated sites in the three-state area the company serves (Georgia, Alabama and East Tennessee). The Blalocks would show off the machinery – and pay for lunch.
“Principals ordinarily stay behind the desk in this industry, but Braxton was out in the field,” Susan says. “Most of the end users were shocked when they realized they were meeting him, not a salesman. Braxton was extremely hands-on, and so many people respected him because he was hands on.”
As they walk next to walls hung with photos chronicling the company’s evolution from heavy machinery to heavy-duty lawn equipment, the Blalocks are clearly proud of how they – and their loyal employees – have grown the business and maintained standards set 80 years ago by their grandfather.
“What’s nice about this award is it gives some affirmation that you are doing the right thing out there in the marketplace,” Bill Blalock says. “It’s an affirmation of what my grandfather, my father and my brother did. When you get bigger sometimes the bottom line is more important than how you got there, and that should not be the case.”
Medium Company Award Winner
Bowen Family Homes, Inc.
Band Of Brothers
By Ray Glier
Rudy Bowen could have allowed his heirs to season a little bit before he tossed them the keys to his home-building business. His son, David Bowen, was just 21 years old. His sons-in-law, Mike Phelps and Tip Cape, were 29 and 30, respectively.
But the “boys,” which is how they are often referred to, think of their experience in the business as one pool of talent and felt they were of age to take the handoff from Rudy in 1993. After all, they began learning the business of building homes while they were schoolboys and they had come to trust one another.
“We’re three sides of a triangle and we meet in the middle,” Cape says.
Fourteen years later, the boys have Bowen Family Homes, Inc. on firmer foundation than might have been expected given the fierce competition in Atlanta’s home construction market. They were named Family Business of the Year (medium-sized category) because they deftly outmaneuvered calamities that usually take down businesses in transition.
Rudy Bowen eased his son and sons-in-law into the business before they took over full control in 1993. He gave them his valued name – and a nice line of credit – but not a vault of money. That, they had to earn themselves.
The company now generates more than $300 million in yearly sales.
Each of the partners has carved out an area of expertise. David, 35, concentrates on the product, creating home designs. Mike, 43, develops land and is in charge of infrastructure. Tip, 43, gets the houses up, along with help from an army of sub-contractors.
“We respect each other’s opinion,” Bowen says. “That’s 15 years of working together to get to this point. We know each other’s talents, we know each other’s abilities, and we don’t step on each other’s toes.”
It was during the home construction downturn in the early ’90s that they decided to combine skills. Phelps had his own modest building business and Cape was in concrete and foundation. David Bowen worked for his father, but also worked for Phelps.
“The three of us were building in the same communities using the same contractors, using the same subs, and really getting along. And, at that time, the market was really slow,” Bowen says. “One year Mike sold five houses, Tip sold two, I sold none. We thought it would be better if we teamed up together.”
In their first year together, they built 56 homes and gained some traction using Rudy Bowen’s name. The next year they put up 109.
Bowen, Cape and Phelps prefer to think of themselves as linchpins, not kingpins. They each manage their respective areas of expertise and farm out assignments to other relatives. All told, there are 13 family members in the business, including Phelps’ father, who manages an arm of the business in Florida.
The three sisters-in-law – Allison, who is married to Tip Cape; Melissa, who is married to David Bowen; and Beth, who is married to Mike Phelps – together run the company’s mortgage business.
“The neat thing about this is we have a personal relationship that is just as strong as our business relationship,” David Bowen says. “We’re all three best friends. We can agree to disagree every day at work, but when we walk out that door at 5 o’clock, it’s over with and that’s what makes a good partnership in a family business work.”
The three families – along with David’s parents – live on an 80-acre farm in Suwanee. They go on vacations together, and the partners hunt and fish together.
“The biggest key [to success] in any family business,” Cape says, “is having the same moral values as other family members.”
Phelps says if any of the subordinate family members makes a mistake, one of the partners not directly related to that person will step in and address the issue. In other words, they don’t ask each other to lord over their wives or sisters and keep their respective families in check.
Phelps sees a one-for-all mentality about profits throughout the company. “We want to see everybody succeed,” he says. “My theory is I want to be in partnerships where partners make good money. When they are successful I will be with them.”
The partners spread the wealth outside the company with significant donations to Children’s Healthcare of Atlanta and the Gwinnett Children’s Center. They helped build a hospice for children in Gwinnett and donated to the American Red Cross after Hurricane Katrina. The list of civic projects and causes the family has helped goes on and on.
“One thing my dad always told us ‘I spent 30 years building my name, don’t destroy it’,” David Bowen says. “We’re very mindful of his reputation. He gave us the relationships that opened a lot of doors for us and the biggest challenge we had was not going in and ruining those relationships with a younger way of doing things with those older guys still active in the business.”
Large Company Award Winner
Sharing The Wealth
By Ed Lightsey
Southwire employees must seem to be the most pampered workers in the state. From the company’s onsite medical center staffed by three doctors who charge just $10 a visit, to the DVD club where workers get the latest movies – free of charge, of course – to tuition reimbursement for college courses, Southwire staffers have access to the kind of perks once exclusive to booming Silicon Valley high tech companies.
The company’s wellness center is crammed with exercise equipment, and Southwire managers often assemble focus groups from the rank and file to explore ways to make the workplace “more family friendly.” Southwire parents are encouraged to stay home when little ones are ill, and they receive time off to visit with teachers for conferences. The lavish attention focused on employees, combined with the family atmosphere in the office and on the production floor, have contributed significantly to the company’s growth – and to its bottom line.
Southwire, a producer of the wire and cable that carry electricity, has seen sales climb from $1.4 billion in 2001 to nearly $5 billion by the end of 2006. At the same time, total employment at the company’s North American facilities has grown from 3,200 to 4,300. Every employee, officials say, is made to feel a member of the family – at least the corporate family.
But the connection between “corporate family” and the bottom line is more than softhearted generosity – it’s solid business sense, says Southwire’s board chairman, Roy Richards Jr.
“It’s all about competition and trying to be successful in a really tough marketplace,” says Richards, who retired from the day-to-day, hands-on management of the company in 2002. “That’s why we have all these benefits and programs. It’s not altruistic; it’s about trying to be successful and attracting and retaining really successful people.”
Southwire was born more than 56 years ago when founder Roy Richards, Sr. wanted his grandmother to have the opportunity to sit under an electric light in a West Georgia where electricity was still a curiosity for many. “He wanted to bring the convenience of electricity to rural western Georgia. He wanted to make life better for his family, friends and neighbors,” states the company’s Family Business of the Year application.
The senior Richards, a Georgia Tech grad, went on to take his company to the top of the industry. Today, Southwire supplies 135 of the nation’s top power companies, as well as dozens of foreign utilities. Southwire has facilities in 23 cities, and the company enthusiastically labels itself as “100 percent owned by the Richards family.”
Stuart Thorn became Southwire’s president and CEO in 2002. Since then he has led a string of acquisitions, including two involving major competitors. He has made the company a leader in new product development, thanks to vigorous research and development.
The company’s corporate largesse follows employees even after they clock out. There’s the Richards College of Business at Carrollton’s University of West Georgia, the Roy Richards, Sr. Cancer Center, Richards Stadium at the city’s Central High School, all community assets that any metropolis would be proud of.
“As it says in the Bible, to whom much is given, much is expected,” Richards says. “We know a lot is expected from us. I personally feel that we have too many things with our name on it in Carrollton. I have no desire to have anything else with our name on it in Carrollton.
“On the other hand, I think that we’ve only done a fourth of the kind of community support that we can do or ought to do. My hope is that in the future, if our business is prosperous, we can do much, much more to support our community.”
And the prospects for that prosperity?
“In the near term, especially this year, we’re working in a housing market that is flat to down, [creating] a much more competitive marketplace than we were in last year,” Richards says. “[Yet], Americans use more electricity today than they ever have, and they use more electric motors to do more things for them than they ever have. All of that bodes very well for our business and makes us thrilled about the future of our business.”
Richards says part of that thrill lies in the development of new technology now under way in the company’s research and development department. There, the focus is on “adapting electrical conductors to a marketplace that is more energy conscious and wants to pay less for the delivery of power.”
It’s a sure bet that Southwire’s employees – and Carrollton’s community leaders – are pulling for the effort’s success.
Century Award Winner
Fred W. Gretsch Enterprises
By Ed Lightsey
Dinah Gretsch met Beatles legend George Harrison twice; once when she was a teenager and ran into the Fab Four in a London pub just before their 1964 appearance on “The Ed Sullivan Show,” and again 25 years later when she joined Harrison in the kitchen of a California home/studio to help him whip up some food for her and husband, Fred.
The London meeting was all thrills; the California meeting was all business – well, truly, that was a thrill too, Gretsch says. To musicians such as Harrison, and Bob Dylan, Bo Diddley and the rest of rock ’n‘ roll’s hierarchy, the name Gretsch (rhymes with stretch) is spoken with the same tone of quiet admiration Michelangelo reserved for the marble quarries of Pietrasanta and Carrara, the raw sources of lasting artistry.
Since its humble beginnings as a small musical instrument shop in Brooklyn in 1883, Gretsch has handed down through four generations a fierce devotion to quality resulting in a number of innovations enjoyed by a loyal following. Artists who’ve played Gretsch instruments over the years include Chet Atkins, Duane Eddy, Phil Collins, Stephen Stills and Neil Young.
Today, Gretsch’s production of guitars and drums is part of Fred W. Gretsch Enterprises, Ltd., a Savannah-based company with strong worldwide ties to other music giants such as Fender and Kaman (percussion instruments). Such alliances have put the Gretsch name in concert halls and recording studios around the world. All this with just 12 employees – the same number it had back in 1883.
“We are about the only USA manufacturer left in the drum business,” says Dinah Gretsch, the company’s CFO. “And it’s still done the same way it was done 60 years ago. All our drums are custom made in our [South Carolina] shop.”
A set of custom-made drums can climb upward of $8,000, out of the range of beginners. To fill that void, Gretsch began a line of less expensive drums that are produced in Taiwan and China.
By the time she was 20, Dinah Gretsch had her own business, a local credit bureau. A woman with financial savvy and a love of music, Dinah’s arrival at Gretsch in 1979 began a landmark era in the firm’s evolution.
She became the first Gretsch female to work fulltime in the company when she brought her financial management talents to the business. “Fred and I are total opposites,” she says. “He’s the visionary and marketing person and I’m the doer of [day-to-day] operations.”
She also serves as director of artist relations, a position that keeps her in touch with the men and women – primarily rock musicians – who use Gretsch guitars and drums to create platinum records and win Grammys. Daughter Lena is a fifth-generation employee.
Fred and Dinah have blended a strong commitment to community service into their business and family lives. “One of the reasons we formed these alliances with Fender and Kaman was to let them handle more of the day-to-day operations so we can focus on community projects,” she says.
Tops on the Gretsch community service list is the Gretsch Center in Pooler, Georgia, a model for music programs tied to various educational levels under the aegis of the Gretsch Foundation. “The idea is to enhance lives through music,” Dinah says.
Last year, the Gretsches awarded five college scholarships, and the family’s guitar contributions remain a popular fund raiser for schools across the country. In 2006, a Savannah school received a donated Gretsch guitar designed in 1958 by the legendary Bo Diddley, and signed by him, as well as by rocker Tom Petty and his group, the Heartbreakers. The instrument brought $6,500 at an auction.
In 2003, the Gretsch Company joined James Brown in receiving Heroes Awards given by the Atlanta Chapter of the Recording Academy for their contributions to music. Fred Gretsch is a member of the advisory board of the Salvation Army in Savannah, while Dinah is active in children’s programs with a number of nonprofits. Both were early major sponsors of the Georgia Music Hall of Fame.
The Gretsches travel about 26 weeks of the year, says Dinah, partly to promote their company and partly to promote music appreciation, especially among youngsters. “We live this business 24/7,” she says. “Gretsch has grown every year and this brand name just keeps getting stronger.”
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