2013 IB Hall of Fame
As IB presents the Hall of Fame class of 2013, we’d like to emphasize that business and philanthropic excellence are the hallmarks of a Hall of Fame inductee. These exceptional individuals were judged to have made significant contributions to their companies, the Greater Madison business community, their respective industries, and the community at large.
We even have one 2013 inductee, Corey Chambas, CEO of First Business Financial Services, who helped write the HOF criteria 10 years ago. In the 2013 class, Chambas is joined by Ellen Brothers, retired president of American Girl; Tim Christen, CEO of Baker Tilly Virchow Krause; Carol “Orange” Schroeder, co-owner of Orange Tree Imports; and Kevin Conroy, president and CEO of Exact Sciences Corp.
Special kudos go to the Hall of Fame Selection Committee, which consisted of the 2012 Hall of Fame class: James Bakke, president and CEO of Sub-Zero, Inc./Wolf Appliance; Dr. Frank Byrne, president of St. Mary’s Hospital; James Garner, CEO of Sergenian’s Floor Coverings; George Nelson, executive vice president of the Evening Telegram Co. (dba Morgan Murphy Media); and Toni Sikes, a general partner in Calumet Venture Fund who also founded The Guild and, more recently, the Art Commission.
Also inside these pages, we present an Executive Register of about 950 executives who are civically involved in some way, shape, or form. This is not a lifetime achievement recognition because some ER selections drop off the list or climb back on, depending on the level of involvement they indicate on their online professional profiles (ibmadison.com/pd). This year, we gave more weight to service on local boards and in local organizations, and we highlight the hobbies of several executives in vignettes throughout the listing.
Ellen Brothers: Celebrating Girlhood
“To be part of a brand and a business and a community of employees that has become one of the most revered companies in the United States, you just don’t get that opportunity very often. To do it in a community such as Madison, which is very philanthropic, is an honor.”
In her polite way, Ellen Brothers is quick to correct anyone who views American Girl simply as a “doll company.” Brothers, who retired as company president last year, doesn’t even use the word “company,” noting that she served a brand that celebrates girls and makes a difference in their lives.
Brothers attributes her Hall of Fame selection to quality associations with the likes of founder Pleasant Rowland, who in 1995 brought the self-described “catalogue gal” to what was then the Pleasant Company. The two got along famously and did a lot of heavy lifting together before the company was sold to Mattel, Inc. three years later.
Brothers also praised Robert Eckert, the retired CEO of Mattel, who understood that American Girl was distinct from its parent organization in terms of culture and customer orientation. He basically said vive la différence, because while Mattel’s biggest customers included Walmart and Target, American Girl’s products are marketed and distributed through its catalogue, website, and proprietary retail stores.
All of American Girl’s dolls have stories, many of them based on women’s contributions to history or contemporary things in girls’ lives, which is what Brothers most appreciates about the company’s business model. The business execution associated with that model, however, is not fun and games. “Everybody thinks toys are a fun category, but toys are a very tough category,” Brothers stated. “It’s one of innovation. It’s one of kids deciding they want something today, and by the time it comes to market, they’ve got new interests. It’s ever-changing and it’s highly competitive.”
For American Girl, innovation is key, thanks to a never-ending focus on core customers — young girls and their mothers — and a holistic look at service, experience, and making an emotional connection with that 8-year-old “bull’s-eye” girl. American Girl relies on a panel of such girls who come to the Middleton office, and others who visit its retail stores throughout the country, to serve as a focus group for product development, whether it’s heroine dolls, toys, books, American Girl magazine, clothes, or accessories.
To foster that innovation, Brothers was known for asking employees, “What does failure look like?” That way, the difficult conversation was had upfront, not at the back end. She’s also credited with creating an environment where ideas are respected and for rewarding innovation in the employee-review process, especially with the brand and customer experience in mind.
In terms of employee training, Brothers developed a mentor-mentee program for new employees, and top company leaders were involved. Brothers herself serves on the Committee of 200, a women’s organization that mentors college women. “A lot of times there is a fear factor for the mentee,” she explained. “We took some of those walls down and gave people insight into other areas of the business.”
In retirement, Brothers has endured knee surgery, which has delayed her long-awaited return to the tennis court, but she has more control over her travel schedule and can be selective about service on business boards like Hillshire Brands in Chicago. She can’t wait to ride horses and take long walks, to finally say “yes” to social invitations that sound interesting, and to start knocking the fuzz off a few tennis balls.
A word of warning to future opponents: Brothers has taken lessons from Madison legend John Powless, who not only is one of the finest tennis players in the world but is also “all about the mind game,” Brothers noted.
Corey Chambas: Underwriting Growth
“It is quite an honor. It’s humbling. I was hoping I wasn’t old enough to be a Hall of Famer yet. I feel I should be nearing retirement or something like that, but it is quite an honor.”
At age 51, Corey Chambas is not the first “youngster” to be selected to our HOF, but he shares a common trait with those who preceded him — business acumen. While the 2008-09 recession and the financial stress it caused put a lot of gray hair on the heads of bankers, First Business Bank, the anchor of First Business Financial Services’ corporate structure, was better positioned than most. Chambas deserves some of the credit for that, for he was part of a management team that navigated through some rough seas.
In the early 2000s, Chambas was among the bank executives warning about the risky investments some banks were making, and the 2008-09 financial crisis would demonstrate how prescient he was. The recessionary environment would leave some marks on First Business Bank, but it remained profitable because it did not take exotic risks in its investment portfolio; instead, it took on risk in its loan portfolio, “where we think you get paid more appropriately for taking risk, and we think we can underwrite the risk, and we think that’s part of our core skill set,” Chambas explained.
Some decisions are learning experiences. First Business went public in 2005 without an initial public offering, a decision Chambas now regrets because, without an IPO, it took more time to garner research coverage and gain institutional ownership, which suppressed stock activity. “Our trading volume would have been more robust if we had analysts covering us from the beginning, if we had institutional ownership from the beginning,” he acknowledged.
Like other banks, First Business saw its stock price sink below book value during the recession, and management waited for the stock to recover — when it made more sense for shareholders — before pulling the trigger on an IPO. That occurred in 2012, when the bank raised $29 million in capital with an eye toward growth. “With all the disruption in the banking industry, we’re pretty optimistic about the future,” Chambas stated. “We’ve grown loans for the last four quarters, which is unusual for the industry.”
FBFS has also expanded into new business lines. In 2012, it got into the accounts receivable factoring business, and it opened an equipment finance office in Kansas City, which conducts business on a broader geographic basis. Chambas described factoring as a financing option for younger or faster-growing companies that have trouble getting the financing they need. A new company might have only one client, a situation that makes it difficult to do standard commercial lending. On the other hand, if that client is a large and healthy corporation, the receivables the new company gets are “valid and valuable.”
“The factoring is a way for these fast-growing companies to get help with their cash cycle,” Chambas noted.
James Garner, who nominated Chambas for the Hall of Fame, believes Chambas’ legacy is helping to grow a local business bank into a $1 billion public company that, in turn, has assisted in the growth of a significant number of local businesses. Chambas feels good about what he’s accomplished, particularly the sharing of business knowledge, but he’s still in the progress of building a legacy.
“Several parts of our company are still at either adolescent or immature stages,” he said. “We have several business lines and banking locations that have room to grow.”
Tim Christen: Global Force
“It’s very gratifying to be recognized with the people you’re trying to serve. I know I should differentiate between an individual honor and one honoring our firm, but it’s intertwined because we’re in the service business and were being recognized by the business community. It’s humbling.”
Tim Christen understands that accountants are often viewed as little more than cold number crunchers, but the CEO of Baker Tilly Virchow Krause knows better, especially since contemporary CPA firms position themselves as trusted business advisors.
One of Baker Tilly’s pearls of wisdom involves cloud computing. Baker Tilly is not an information technology vendor, but the firm is helping clients convert their technology platforms to cloud computing. Some might view that as an example of advising out of one’s league, but Christen said the better accounting firms help clients look for cost savings.
“As time passes, all businesses learn lessons from their experiences,” he said. “One of the lessons of the Great Recession is that businesses need to be on a continual quest to do more with less. Cloud technology solutions are a great example of a tool that enables you to do more with less.”
Christen is best known for overseeing the rapid evolution of Virchow Krause, once a small Wisconsin-based organization, into a national and international player. He accomplished this with an aggressive merger-and-acquisition strategy that expanded “VK” to large markets, and with the decision to take on the Baker Tilly name and represent its network in the United States. Baker Tilly is one of eight globally branded accounting networks, so the firm that began in smaller Wisconsin cities now has a global reach.
“When we work on a multinational client matter and we do one report in Paris and one in Madison, they both say Baker Tilly, whereas our local competitors would have two different names on the report,” he said. “The growth and the globalization of the firm is the business achievement I’m proudest of.”
For Christen, another proud accomplishment is his role in building the firm’s culture of giving back to the community, and nowhere is that better illustrated than with the HERO program. A growing number of employers have policies that allow their employees to take paid time off to serve the community, either through a nonprofit or by championing a cause they believe in. At Baker Tilly, the HERO program makes that possible.
In Christen’s view, employees with this community-service ethic are the type needed to build a great firm, but the organization must provide pathways for them to make a difference. The HERO program encourages people to pick their own cause and devote the equivalent of a full day’s work to support it.
The program is rooted in the firm’s values, which include stewardship on behalf of one’s community and employees. “Madison has been very good to us, and we need to be good to the people of Madison,” Christen said. “I think there is a virtuous circle there.”
Another part of Baker Tilly’s culture is respecting how different people work. Christen took issue with Marissa Mayer’s decision to halt telecommuting at Yahoo, asserting that the company’s policy was overly broad. He believes such policies should be tailored to individual roles. “If my role is to train and mentor people, then I probably need to be in the office,” he stated, “but if my role is to do technical client work and I’m spending the entire day working on a computer, I can do that effectively from anywhere.
“Differentiating the role of the individual is important in terms of determining the amount of telecommuting that can go on.”
Carole ‘Orange’ Schroeder: Retail Oriented
“Having looked over the list of previous honorees, I’m very pleased to be in the same company of people who have been such strong leaders in our community, people who have given so much of themselves to the Madison area.”
Long before information technology was democratizing various aspects of our lives, Carol “Orange” Schroeder was democratizing management. Schroeder, co-owner of Orange Tree Imports, manages her 38-year-old store as a “participative democracy.”
Borrowed decades ago from a professor, the concept calls for involving employees in managing the business. It applies to many areas, as everyone is in charge of a section of merchandise, but the store also finds it useful in hiring. Employees are part of that process, from résumé reviews, to screening, to interviews, to deciding, through a vote, which candidates will become co-workers.
“They have always gone with majority rules on who to hire,” Schroeder said. “In one case many years ago, we interviewed for a personnel manager and the staff was split. We started over again because we didn’t want to bring in anyone that half the staff was opposed to hiring.”
In retail, staff turnover is a challenge, and Schroeder believes the democratic approach brings retention advantages. “We’ve been very lucky with that, especially because they like each other so much,” she noted. “We have a couple employees who have been with us for 25 or 30 years.”
Schroeder does more than sell merchandise. She is a writer, having penned the book Specialty Shop Retailing: Everything You Need to Know to Run Your Own Store, plus blogs and trade magazine articles. After the book was translated into Russian, Schroeder received an email from a woman who wrote that her dream of owning a bridal boutique (in Moscow) came true because of the book.
“It’s a wonder to think in our global world that we can reach out in some way and help people without knowing who they are, without even leaving Madison,” she said. “I find that really gratifying.”
Another of her business values appears in a chapter devoted to specialty retailing and stresses the importance of shop owners being involved in the community, something Madisonians instinctively know but that her New York publishers didn’t understand. Schroeder is proud of the Monroe Street community — she founded the Monroe Street Merchants Association — and the way the area has developed into a destination of specialty shops and restaurants, and she wanted retailers to think more about the intangible benefits of their industry, not about being cash machines.
“At my first edition, my publisher said, ‘We’re taking that chapter out because it has nothing to do with business.’ I kind of laughed and thought, maybe not in New York City, but a shop in a small town in Wisconsin or in Madison has the opportunity to support all kinds of local arts organizations and social services and educational institutions,” she stated. “In a smaller town, you really have to be involved in those organizations because it makes you part of the fabric of your community.”
Another positive is that in the past decade, independent stores have become more important to national suppliers. When stores like Target source all their products directly from the manufacturer, there is less of a role for a salesman or woman who travels through Wisconsin. “Having gone from being a fairly unimportant little shop to some of our suppliers, we became one of their stellar accounts,” Schroeder said. “We’ve gotten a lot more respect in the past decade.”
Kevin Conroy: Exacting Standards
“It means a great deal. It’s a tremendous honor to be selected by this group of people. I would also say it’s a tremendous honor to be part of such an incredible group of business leaders.”
Kevin Conroy doesn’t refer to himself as a turnaround artist, but the label seems fitting. Conroy, the former chief executive of Third Wave Technologies and current president and CEO of Exact Sciences Corp., is in the process of transforming his second local health technology firm.
With Third Wave, he employed greater focus — simplifying corporate priorities and narrowing the product development pipeline — to salvage a molecular diagnostics company that was developing tests for the human papilloma virus. Third Wave was eventually sold for the handsome sum of $580 million to Hologic, a Boston-based medical imaging company.
With Exact Sciences, Conroy has led an effort to redesign a technology for non-invasive, stool-based tests that screen for colorectal cancer and increase patients’ willingness to be tested. Management was encouraged by the results of a recent colorectal cancer screening study, which showed the product, Cologuard, had 92% sensitivity for the detection of colorectal cancer and was 66% sensitive for polyps of two centimeters or greater in size, which are the most likely to progress to cancer.
After initially dropping, the company’s stock price (at the time of this writing) was up 15% compared to where it was the day before the study’s data were released, and the company expects to launch the product upon FDA approval.
In both cases, Conroy said that by focusing on something “big and important,” the companies were able to achieve things that many people didn’t think they could. Each year, Exact Sciences sets three clear priorities, along with the strategies and tactics to achieve them, and constantly reinforces them via company communications. Conroy believes it’s the primary job of the CEO to build and maintain the culture and structure necessary to reach goals.
“You have to have clearly defined roles within the organization, and the role of the teams that those individuals work on also has to be clearly defined,” he stated. “The world is very collaborative today, and the collaborative model is more important than at any time in history. It’s critical that our teams have people from different parts of the company, cross-functional teams, that work together.”
Beyond company walls, Conroy has been active in efforts to improve the availability of venture capital in Wisconsin. At this writing, a proposed $25 million fund-of-funds program to boost venture capital deployment had passed the State Assembly and moved on to the Senate. Gov. Scott Walker has pledged his support, so the state could have another tool to boost new business formation, which has been slower in Wisconsin than in other states.
Under the bill, money would be targeted to agriculture, information technology, engineering, advanced manufacturing, and medical devices, but the Assembly bill would not allow state money to be invested in biotechnology companies. Conroy realizes the $25 million is well below what other states have committed, but he also knows Wisconsin has to start somewhere.
“This effort would be a small step at spurring the growth of high-paying technology jobs in the state of Wisconsin, and that’s really important,” he said. “Wisconsin is near the top of the country in terms of new idea formation and fundamental research, and we’re near the bottom in terms of new company formation. The biggest cause of that gap is the lack of private capital that gets invested into those ideas.”
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