Hall of Fame 2011
What if you could find a business executive who not only has what it takes to achieve business success, but also has made an innovative mark on industry — while finding time to contribute mightily to community and encourage employees to do the same? If you could find such an executive, he or she would be an ideal candidate for the In Business magazine Executive Hall of Fame, and five such people have been selected for the Hall of Fame class of 2011: James Imhoff, chairman and CEO, First Weber Group; Laurie Benson, CEO, LSB Unlimited; John Larson, chairman and CEO, National Guardian Life Insurance Group; David Kruger, president, Fiore Companies; and Jay Smith, chairman and CEO, Teel Plastics. They were selected not by IB staffers, but by the sterling 2010 Hall of Fame class that features David Anderson, president and CEO, American Family Insurance; David Walsh, partner, Foley & Lardner; Tom Still, president, Wisconsin Technology Council; and Kathleen Woit, president, Madison Community Foundation. As you read the business stories of the Class of 2011 on the following pages, you'll learn why they are held in such high regard by their Hall of Fame peers.
James Imhoff, First Weber Group
"I think sometimes you get involved in the community and think you should be doing more, but then you realize that you're running a business and you can't be everything for everybody. To me, this is quite an honor."
It's one thing for a CEO to be involved in philanthropy, it's quite another to stick out his chin on public policy. From his advocacy for the high-speed train to his position as incoming chairman of the Greater Madison Chamber of Commerce, James Imhoff has not been shy about taking a position and spelling it out, but you can do that when you're more pragmatic than ideological.
Imhoff's political involvement, including his work with a realtor's PAC, was cited by American Family's David Anderson, who nominated him for the Hall of Fame. The burning issue of the moment is the wisdom of extending the Bush tax rate cuts, which he supports in the current economic climate. But realizing the heresy of saying what follows, his pragmatic side believes that at some point, federal taxes will have to be raised or adjusted.
"I don't know if you saw on television a few weeks ago, but David Stockman was on 60 Minutes. David Stockman was Reagan's budget director. He was talking about the fact that in the United States, before this last debacle occurred, 5% of the population controlled something like $13 trillion or $17 trillion in wealth. Five years later, in the middle of this debacle, that 5% controls $41 trillion of the nation's assets. He said that in most cases, those people wouldn't mind paying more taxes."
Thanks to his employees, growing First Weber Group into one of the largest real estate companies in the nation hasn't been too taxing for Imhoff. As the CEO of a firm with $2 billion in property sales, he has some insight into whether elected officials have done enough to spur growth in the housing sector. Imhoff experienced the 1980-81 recession first hand, and he said that downturn was worse on the housing industry than this one. However, this recession has now lasted longer, which could eventually make it the worst for pure longevity.
Housing usually helps lead the economy out of recession, but not this time. "The only thing government did to stimulate the housing market was the $8,000 tax credit for first-time homebuyers," noted Imhoff, whose industry had some input into the program through the National Association of Realtors. "Did it help? Yes, but we also ended up with a situation, like cash for clunkers, where the market died shortly thereafter."
In retrospect, Imhoff said it would have been better to offer the $8,000 credit through the end of April, then a $4,000 credit though August, and a $2,000 credit through the end of the year. "I think it would have had the desired effect, but the cliff that it [the actual policy] created was almost irrational at times."
One viewpoint contends that government should get out of the way and allow the housing market to hit bottom. "The general consensus now is that it just has to happen on its own," he stated. "Home ownership is a core value in our country. Nothing has changed with people's desire to buy homes. It's a consumer confidence issue."
When consumer confidence comes back, so will the jobs. "We still have 90% of our population working, so that means we have 10% unemployment," Imhoff noted. "Well, those other 10% are not going to get hired back until the 90% who are working decide that they feel better about what's going on and they decide to spend some money on goods, services, homes, and cars."
While Imhoff is concerned with civic affairs, philanthropy is not an after-thought. He spearheaded the founding of the First Weber Group Foundation, which has donated more than $400,000 since its inception to housing causes and other charities. "I was raised by the Dominicans, going to Edgewood (High School), and they believed in community service," he explained. "They've got a whole litany of things they talk about, which starts with justice, but you have to give something back to your community, and I've been doing that for many years. I also happen to love Madison."
Laurie Benson, LSB Unlimited
"I hold each of these [2010 Hall of Fame] leaders in such high regard. It's a special honor, and very humbling that they would select me."
For Laurie Benson, the Hall of Fame recognition is a testament to her former employees and, in her words, their values and their extraordinary service to customers over many years. Benson helped build Inacom Information Systems from an IT start-up firm in 1984 to a company with $80 million in annual revenue and 150 employees in Wisconsin at the time of its sale to Core BTS, but she wasn't afraid to rely on others — employees and board members — to help her build Inacom.
Now, as the head of LSB Unlimited, she is the person other entrepreneurs turn to.
Her deft use of internal and external boards of directors is instructive for would-be entrepreneurs. With Inacom, she established boards whose members were strong business leaders with different and often conflicting views. She wanted that creative tension because it expanded the intellectual firepower of her company and because it challenged her way of doing business.
"I became a student of boards," Benson explained. "I recognize that there are boundaries on my thinking, so the best way to expand those boundaries was to bring seasoned professionals onto my board."
To make sure it was thinking boldly enough, Inacom sought out directors who were established business success stories, active in the community, and unafraid to stimulate some debate. Among those who served as Inacom's internal directors were Frank Albi and Gary Hoffman, both of who were Inacom executives, and those who served as outside-independent advisors were Tom Ragatz, Londa Dewey, Doug Reuhl, Donna Sollenberger, Bradley Hutter, Loren Mortenson, Barbara Mortenson, Blaine Renfert, Bill Young, and Art Scheuber.
"I remember one of our board members asking me after a meeting whether I wanted to be challenged like this, and I said, 'I love it,'" Benson recalled. "That way, when we move forward, we can take risks and know that we have anticipated the implications on the business as well as the people involved. It gave me great confidence to think big."
With LSB Unlimited, Benson helps other entrepreneurs build their boards. She still hopes to join one or two additional boards because she saw first hand the power and impact of her own board, and she'd like to bring her passion for business to other organizations. "I want to serve others as I have been served," she stated. "I will always be grateful to my employees and customers and board and community for their support and encouragement and inspiration at Inacom. I'm carrying this forward in my head and my heart each day because I know there is important work to be done."
Gratitude is one reason why Benson believes it's important for her to be involved in the community through things like the Henry Vilas Zoological Society, the Wisconsin Women's Business Initiative Corp., and Make Mine a Million, and by mentoring area business women. In Benson's view, Madisonians are fortunate to live and work in a community where so many leaders work together to make things happen for others.
Benson, who graduated from UW-Madison with a bachelor's degree in nursing, and once worked as a nurse for the American Red Cross Bloodmobile, is trying to make things happen with business outreach for the Power of Nursing capital campaign. Benson appreciates the campaign's mission to honor the legacy of nursing and to help shape the future of nursing. "It's a great way for me to bring my health care background together with my business background and make a difference," she said.
Benson, the Small Business Administration's 2009 National Women in Business Champion, views herself as an ordinary person blessed with extraordinary opportunities. "I choose to get involved where my passion lies, and that's about bringing forward our humanity, the well-being of animals, the health care of people, and the application of great ideas in a business environment that have a lasting impact."
John Larson, National Guardian Life Insurance Group
"I'm extremely flattered, given the quality of the people in the previous class."
The personable John Larson doesn't believe in a "my way or the highway" management style, preferring instead to build consensus with his senior management team on major decisions. You could argue that a number of different management styles can be effective, but Larson's is the one that works best for NGL.
"This company is a mutual company," he explained. "I don't own it or any piece of it, other than as a member of the insured policy holder base. I've taken pride in building what I'd call a solid senior staff that has input into every decision, and we try to do the best job we can in building a consensus to make the best decisions."
Larson notes with a wry smile that the process is cordial "most of the time," but he always tries to talk last so that nobody's thoughts are inhibited. He does not want "yes" men or women, which came in handy when the company faced a crossroads in 1997. If you've ever wondered how National Guardian Life has managed to survive for 100 years, part of the answer is adaptability. "Frankly, about 13 years ago, we were asking that same question — how do we survive? — because we were trying to be all things to all people," Larson recalled. "We were not being what I'd call successful at that point, and we decided we could not compete with the giant companies that were all looking for the same affluent market."
National Guardian Life carved out a niche in the pre-need insurance market, developing it to the point where it has the third largest sales of pre-need insurance, which are policies that are sold to individuals to fund their funeral services, in the United States. It was a difficult but necessary decision to make, given the adjustments required of NGL's salesforce, but the company now writes upwards of $300 million annually in life insurance products, and pre-need insurance leads the way.
National Guardian Life puts a lot of stock in employee education and training, and in giving employees space for community endeavors. There is an element of risk in making such an investment in training because it eventually could benefit another employer, but Larson has found that he retains enough of them to make it pay off. The main challenge now is to make more employees aware of it, which is an on-going process.
Under Larson, a former president of the Wisconsin National Guard Association and former president of the Village of Maple Bluff, the company has been active in nonprofits like the United Way, the Red Cross, and Meals on Wheels. "We feel that because of the industry we are in, life insurance, we should maximize our health and human service support in the community."
David Kruger, Fiore Companies
"Obviously, I'm very humbled at being chosen by great people in the community. I generally try to keep a low profile with these kinds of things."
David Kruger is just a little embarrassed to have this kind of publicity because he has great admiration for people who toil in the nonprofit sector and receive little recognition for it. Still, he had a very enthusiastic evangelist in David Walsh, who knows a great deal about Kruger's many behind-the-scenes contributions.
A lot of people know about Fiore's commercial development holdings in hotels, shopping centers, industrial buildings, and Class A office buildings, but not as many know about the investments Fiore has made in local information technology, biotechnology, and green energy start-up ventures. With the dearth of venture capital a high-priority issue here, he believes maintaining this portfolio is important.
"With all of the research and new development that comes out of the university, venture capital is an important part of the start-up business community in Madison," he stated. "To be involved with that is certainly kind of natural if you are a business person in Madison."
To Kruger, there is no difference in satisfaction level between building something from scratch and rehabilitating an underused existing property. Building from scratch enables Fiore to build a brand concept in the commission of designing something that is financially feasible and that can be supported by the market, "which is always the trick," he noted. Taking an existing product and transforming it into a new use, which Fiore has done with the renovation of 222 West Washington Avenue (aka the United Bank Building) and with Verex Plaza, keeps something valuable alive, especially if it's a historic building.
Kruger has been involved in the community on several fronts, including organizations like the Wisconsin Housing Preservation Corp., the Wisconsin Housing and Economic Development Authority, and HospiceCare. As a past vice chairman of WHEDA, he finds merit in a proposal to use the agency's bonding authority to create a venture capital "fund of funds" to help advance small technology businesses.
Over the years, he said WHEDA has leveraged its resources to provide affordable housing around the state, enabling more people to purchase a home through new homeowner financing. Kruger believes there are opportunities for that same group of people, who really are bankers, to operate on a broader level — if they are given more resources to work with.
By permitting them to facilitate small business development through venture capital formation and deployment, while taking steps to ensure the money isn't diverted from its original purpose, "it really is a pretty natural transition for them if they are given that ability and authority," he said.
"In the venture capital arena, the trick will be to apply a longer view and probably be willing to take more investment risk than would a traditional banker," noted Kruger, secretary of the State of Wisconsin Investment Board.
In forwarding Kruger's nomination, Walsh said he has been a success at every level of business — as an attorney well versed in real estate, tax, and corporate law, and as a developer who controls more than $150 million in area real estate. Now that he's spent the better part of his adult life climbing the ladder, Kruger likes the place he's in because now he can assist the organizations he considers to be an essential part of any community — the nonprofits.
"You tend to spend the earlier part of your career focused on raising your family, advancing your career, and building a base of knowledge in whatever field you are involved with," he said. "As time progresses, you are free to spend more time focusing on how to give back some of the knowledge or experiences you have, or the resources you've been fortunate enough to gain. That's probably much more important than the original goal of acquiring those resources or acquiring that knowledge in the first place.
"If you can help nonprofits either with the donation of your time or money, or some combination, it's probably one of the most enjoyable and satisfying things you'll do."
Jay Smith, Teel Plastics
"It is indeed an honor because the past Hall of Fame recipients are people I have great respect for."
Madison native Jay Smith is a "three-legs-of-the-stool" guy — the legs being family, work, and community — but for Smith, family is the leg that has been the most interwoven through everything.
It was family that led him to manufacturing, family that served with him in most of his career stops, including the current one, and family that influences his work in the community. "Those three legs have always provided energy, vitality and wonderful relationships," he said. "I've built on those elements my entire career."
Born and raised in Madison, he has been married to his college sweetheart for 47 years, and they raised two children who now are helping him run Teel Plastics. Add four grandchildren and a surviving parent to the mix, and the Smith clan ranges from Jay's 103-year-old mother to his two-year-old grandson, all of who reside within 10 miles of each other.
Family has not only kept him grounded, it has made him industrious. The defining moment in his life came when his father, an entrepreneur in the twilight of his career, planted a seed by starting the Fordem Co., a new packaging business. Shortly thereafter, Jay and brother Jerry joined the business and nurtured it by focusing on the emerging market of sterile medical packaging. Twenty years later, they found themselves leading that market in the United States.
The next step was to figure out how to take Fordem worldwide, so the Smiths decided to merge with an international conglomerate called DRG. At that time, DRG was the largest manufacturer of medical packaging outside the U.S., and the combined companies, DRG Medical Packaging Group, became one of the largest in the world. Jerry chose that time to retire, and Jay went on to manage DRG business units in the U.S. and Canada. He traveled the world, at one point maintaining homes in Madison and the United Kingdom, and he eventually became president of the conglomerate, which manufactured in 19 countries.
Family would play prominently in his decision to invest in a new technology in 1992, as Smith acquired Teel Plastics along with his children. Teel, which makes industrial and medical tubing and pultruded plastic products, has four factories and a workforce of 275 in Baraboo.
Smith is a firm believer in one of the things Ayn Rand asserted in Atlas Shrugged — that making things is at the very core of America. As someone who has conducted business internationally in the manufacturing realm, he understands that innovation is a key to global competition. Teel Plastics' growth potential lies in developing new products for existing markets and new products for new markets.
Teel has introduced a pultruded fiber glass technology for window and door frames that complements the energy efficiency of low-E glass. The company, which has dedicated an entire factory and is adding people and machinery to produce the fiber glass, is working with several window and door manufacturers in Wisconsin and the Midwest to bring it to market.
At Teel, research and development is not an occasional thing, but an ongoing effort centered around materials, process, or both. Nanotech, the science of material properties, is another frontier on Smith's exploratory map. In his view, the nano possibilities are both exciting and endless, as Teel and others are just scratching the surface regarding the evolution of material properties.
Outside the factory, Smith believes the connection between family, business, and community service is relationships — relationships with clients, relationships with employees, and relationships with people "who make it all happen in the community."
For example, if Gov. Scott Walker wants to improve Wisconsin's business and economic standing, he should develop and maintain relationships — partnerships, really — with business leaders. "It's not about one meeting," he noted. "These issues go on, they surface all the time, and they are fluid. There will be new ones tomorrow, so communication has to be constant."
Relationships are but one reason Smith believes it's important to be involved in the community through organizations like the United Way, the University of Wisconsin System's Board of Regents, and a variety of local business boards. His work in the community began in his early 30s, when he was appointed to the Dane County United Way Board. A few years later, he would chair the Dane County United Way campaign, giving him an opportunity to meet important people and build relationships, across Dane County.
His interest in education led to an appointment to the Board of Regents, where he and former President Kathryn Lyle co-chaired a statewide economic summit. The summit produced ideas that are in place today, including the creation of the Wisconsin Technology Council to advise the Governor and the Wisconsin Legislature on technology policy, and the development of regional economic development bodies like Thrive, the Milwaukee 7, and the New North to get elected officials and business leaders thinking beyond community.
Reflecting on all this, Smith looks at his life as a series of stages. "In each one, I've been able to find lots of fun, excitement, and energy. I'll probably never retire because those are pretty incredible drivers."
Sign up for the free IB Update — your weekly resource for local business news, analysis, voices and the names you need to know. Click here.