Research

The profile of a top entrepreneur: Commitment to quality, customer service and employees

What are the characteristics of companies that succeed, even in tough times? The stories behind the five winners of this year's Spirit of Enterprise Awards are instructive. These companies are focused on quality, dedicated to excellent customer service, and committed in a deep way to their employees and communities. The mission of the Spirit of Enterprise Center, which presents the awards, is to honor, assist and educate entrepreneurs. The 12th Annual Spirit of Enterprise Awards does just that.

2008-10-08

What are the characteristics of companies that succeed, even in tough times? The stories behind the five winners of this year's Spirit of Enterprise Awards are instructive. These companies are focused on quality, dedicated to excellent customer service, and committed in a deep way to their employees and communities. The mission of the Spirit of Enterprise Center, which presents the awards, is to honor, assist and educate entrepreneurs. The 12th Annual Spirit of Enterprise Awards does just that.

American Traffic Solutions: Emerging Entrepreneur Award sponsored by Edward Jones

Plenty of American Traffic Solutions' downstream customers are unhappy about their experiences with the Scottsdale, Arizona-based photo-radar enforcement company. But as chief executive officer and president James Tuton likes to say, "We might not be very popular with some people, yet we do save lives."

Founded in 1987, American Traffic offers complete traffic enforcement systems, including the custom software, camera equipment, set-up and maintenance of the photo-radar site, photo processing and image analysis of the speeders, red-light runners and other violators. The process produces two overview photos and a license-plate shot per scofflaw, which go to the upstream customer — usually a police department or other government agency.

There, if it's determined that a traffic violation has occurred, a ticket is issued to the car's owner. From the upstream customers, American Traffic gets high marks for accuracy, quality and superior customer service. Tuton and his brother, Adam, who is executive vice president and chief operations officer, run the company, employer to 425 people.

With more than 130 customers in 18 states and the District of Columbia, it is the largest, independently owned photo-radar enforcement company in North America. The company has branched into other areas using the same technology. For instance, national car-rental companies use American Traffic systems to satisfy toll-booths encountered by renters, and border-security agencies put it to work tracking drug dealers and others entering the country illegally.

At its call center, where other companies may experience turnover of up to 80 percent annually, Tuton says turnover is single digit. What contributes to the contented employee base? Tuton ticks them off: a thorough training period for new hires, followed by "nesting" with experienced co-workers; weekly monitoring for accuracy; a company culture that rewards quality over quantity and an emphasis on personal responsibility.

"We deal with a huge volume of transactions, around 600,000 events every month. If we do something wrong it will escalate to the mayor or a CEO or become a front-page story. Our work must be high quality, because we affect peoples' lives," Tuton explained. Recently the company has attracted lots of attention, thanks in part to its stellar revenue, which grew more than 80 percent, compounded quarterly from 2007 to 2008. During the same period, its customer base grew 100 percent.

Sundt Construction Inc.: Entrepreneurial Leadership Award

Honesty. Integrity. Collaboration. Mentoring. Wealth-sharing. Decades after the last of the founding family left the company, current employees at Sundt Construction Inc., still rely on old-fashioned business values adopted before the turn of the century. "We got good corporate parenting from the Sundts. They passed on a very strong belief system that is intrinsic to operations, to how the business is run, and we continue passing them on to the younger groups of employees," said J. Doug Pruitt, chairman and CEO.

Based in Tempe, the general contractor/construction manager was one of the first to become employee-owned under new federal law back in 1974. Today, Sundt is owned by its 1,600 employees, each of whom holds company stock. It truly is an egalitarian organization, with the largest stockholder owning just 2 percent of Sundt's shares. To retain the most skilled workers, Sundt has its own six-person training and development department.

Employees can take classes internally, through outside courses or at industry conferences. Based on his or her job description, the employee learns about cost controls, computers or regulatory compliance. Employees also learn through "academies" determined by job role — there's an Engineering Academy, a Civil Academy, a Project Management Academy, Pruitt said. "We also run two leadership development programs.

One is for employees in their mid-20's, and lasts 18 months; the other is for people in their mid-30s, and lasts 36 months," Pruitt explained. That's not all. Sundt managers teach leadership skills by example, focusing on "teaching people how to help each other." Teamwork and collaboration skills also are critical, because it takes people from several divisions and departments to research a potential project, figure out a bid and chase the job.

"We get buy-in from employees because they're working together. They must be competitive AND collaborative to chase a federal job. People stop undermining each other when they work here. Feelings of ownership and camaraderie grow out of that," Pruitt said. Beyond hourly rates and salaries, Sundt compensates employees with dividends earned on group projects; the dividends go into their pension plan.

"Our company did a little bit more than a billion this year. Some years, dividends are larger than annual salaries," he added. Sundt employees even collaborate on helping their communities, by participating in the non-profit Sundt Foundation. The foundation matches employees' monetary contributions to charities and also makes charitable grants four times a year.

The foundation's impact is a point of pride for employees, especially long-timers like Pruitt, who joined Sundt 40 years ago, when he was just 21 years old. His favorite company saying: "When making choices, ask yourself if something is the right thing to do. If it is, it's the right choice for the company."

Televerde: Innovation in Entrepreneurship Award

Hundreds of women have made the jump from prison inmate to lawful taxpayer thanks to a progressive Phoenix company that sells marketing research and sales leads generated by its prison-grounds call-center. The participating inmates at the Arizona State Prison in Perryville attend training, then settle into working the phones and computers while they're incarcerated.

Televerde software and equipment safeguard sensitive data, and the company's information technology staff monitor all communication to satisfy Department of Correction regulations. The program has worked without a confidentiality crisis for 13 years, said James Hooker, Televerde president and CEO. Once out, assuming they get released, many former inmates continue working for Televerde "in the world."

In fact, approximately half of the women working at the company's corporate office came out of Perryville. They are welcome to pursue their interest in human resources, IT or other areas of the company, or they can stay in marketing, Hooker added. What kind of companies will pay for marketing information gathered by convicted drug dealers, identity thieves and check kiters? Just about every kind of company, according to Hooker.

"We have very large, multi-billion, multi-national companies as customers and we also do business with small soda makers and medium-size technology firms." With a laugh, he adds, "we are the closely held secret of about 1,000 companies." Sounds crazy, but it works. Hooker emphasizes that each employee is expected to contribute not just their physical presence, but their heart and soul to the greater goal, which he defines as "understanding that success is tied integrally to customers, employees and the communities in which we operate.

Integrity is critical. Our workers know they are not just responsible for themselves, but responsible for their co-workers. It's synergistic." Televerde also fosters a culture of partnership with customers. This may mean taking a smaller profit if an unforeseen factor is dogging the project, and it could also translate into dropping an unethical partner once a contract is completed.

Hooker's goal is to exceed customer expectations and create customer loyalty through continuous improvement. As a result, he spends less time and money on formal customer retention programs than many competitors. Founded in 1995, Televerde employs 400 people at four locations.

ATS Electric, Inc.: Special Achievement in Entrepreneurship Award sponsored by Rich Dad

Several years before founding ATS Electric Inc., a Phoenix commercial electric contracting company, Robert Sutton had a customer-service experience that still influences him today. "Very early in my management career, I was in the client's office and he started to say 'I might have a job for you at this [home improvement big-box store]. First, let me call the contractor who did the last remodeling there.' While I waited and watched, the client got increasingly frustrated.

He called four numbers at the contractor and got nobody. No one was available," recalled Sutton, ATS president. "I walked out of there with a $50,000 contract to remodel the gardening department of a home improvement big box. If the other contractor had simply made sure his phone was answered, I would not have gotten his client. I'm still remodeling for them, all these years later," he said.

Founded in 2001, ATS Inc. employs 115 people. Sutton evaluates the quality of a completed project by asking three questions: Is the client happy? Did we get it done on time? Did we make some money? To get a "yes" to each question, Sutton has learned his staff must retrain experienced electricians, techs, project managers — basically everyone — once they're hired.

That's because they've likely absorbed the type of indifferent customer service many companies shovel out to disenchanted customers. One of his rules is that a crew will show up at the job on the appointed day, not one day or one week later, as often happens among contractors. But once a single crew gets off track, it delays the framers, the painters, the plumbers, the electricians and everyone else working the project.

ATS employees constantly work to mitigate the scheduling chaos common in construction. When it comes to job satisfaction, though, Sutton's favorite moments aren't about profits or finish dates. Instead, he gets joy out of watching younger workers grow and mature in their skills, and willingly helps those who will walk his way.

"Last Wednesday, one of my young journeymen came in to see me. He was trying to buy a house, but thanks to the tightening requirements, he needed a couple thousand dollars," Sutton said. "To be able to help his family out — the look on his face when his company said 'yes' — oh, that is my reward."

Community Tire & Automotive Service Specialists: Overcoming Adversity Award sponsored by the Arizona Lottery

Phoenix business partners Howard Fleischmann Sr., 58, and Kim Sigman, 60, tell the 45 employees spread among seven tire and auto repair shops the same thing: "Treat each customer as if she were your mother." That doesn't mean customer service is always ideal at Community Tire & Automotive Service Specialists. As Sigman noted, "Everyone has good and bad days, including ourselves. We are all customers of other businesses.

But nobody can afford a bad day when they're working behind a retail counter." So Fleischmann and Sigman teach employees to do what they do: let the distressed customer know that "we really care about them having a good experience with us, and that we never intentionally do wrong. If something is wrong, we need to know, so we can correct it," Sigman explained.

While Fleischmann handles much of the business administration, Sigman hops from store to store, delivering cupcakes, training newbies and schooling new managers. "I spend half of my work time training, training, training," he added. "And we don't just train, we empower them to make things right, at that moment, with the customer, instead of coming to ask us for a solution." That's part of the secret behind the amazing feedback they get from customers, he said.

But another reason that CTASS stores are well-loved members of the local communities stems from their charity work. The seven store managers, all of whom participate in the local chamber of commerce, also pick a charity to focus on. For the last three years, that charity has been the 100 Club, a nonprofit that supports the families of fallen law enforcement and fire fighting personnel.

Most recently, they raised $4,500 through a golf tournament. One store cleans up a nearby elementary school to clean up the neighborhood every month. Other stores hold fund raisers at the fair grounds. "We feel like a family, all of us, our neighborhoods, our stores, the school kids. We all want a good life," Sigman said.

Bottom Line:

• Sundt's President and majority stockholder John Sundt died of a heart attack in 1965. Other company principals couldn't afford to buy the company, so Mrs. Sundt gave them the time and opportunity to form first a profit-sharing plan and later, an Employee Stock Ownership Plan.

• September was a momentous month for American Traffic. First, Goldman Sachs became the company's first institutional investor. Second, it made the Top 25 Fastest-Growing Private Companies list compiled by the Arizona Corporate Excellence Awards, then snagged the Spirit of Enterprise honors.

  And, Tuton got his first-ever American Traffic-generated ticket. "My son was horrified. I was talking to him, there was construction, then that fraction of a second — well, what can I say, except that I paid the $204," he said. "Everybody at work found out."

• Growing up in Baltimore in the '50s, Televerde's Hooker shoveled snow on weekends for extra cash. "I realized back then that there are two ways to do things, a right way and a not-so-right way. 'Right' is when the customer said it was done the right way."

Entrepreneurship Management